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Fiscal Impacts On Output In A Small Open Economy: The Case Of Albania

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  • Nikolay PATONOV

Abstract

The paper is intended to study the effects of total government spending and tax revenue on the annual GDP growth rate in Albania. On this base, we can examine whether and to which extent the macroeconomic governance could rely on those fiscal instruments in terms of a small open economy. The empirical methodology is based on regression analysis which includes OLS estimation on simply specified regression model and Vector Autoregressive estimates. The results support the assumptions that government expenditure is a weak instrument for policy impacts and the government must rely on taxation to stimulate economic growth. JEL Codes - G38; H21

Suggested Citation

  • Nikolay PATONOV, 2016. "Fiscal Impacts On Output In A Small Open Economy: The Case Of Albania," Scientific Annals of Economics and Business (continues Analele Stiintifice), Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, vol. 63(2), pages 161-169, July.
    • Handle: RePEc:aic:saebjn:v:63:y:2016:i:2:p:161-169:n:28
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    More about this item

    Keywords

    tax revenues; government spending; economic growth; small open economy;
    All these keywords.

    JEL classification:

    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation

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