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Fiscal policy and the optimal gdp under a budget constrain condition

Author

Listed:
  • Alin OPREANA
  • Diana MIHAIU

    (LUCIAN BLAGA UNIVERSITY OF SIBIU)

Abstract

In the current economic environment caused by the crisis, government loans have reached very high levels and have put pressure on the economic growth of all states. Under these circumstances governments are obliged to use a fiscal policy that takes into account the existence of a strong budget constraint and the perspective of a sustainable economic growth, which should further allow the repayment of government debt. Thus, this study analyzes the existing situation in the United States. This paper aims to identify the level of U.S. GDP, which should be achieved in the conditions of a budget constraint, determined by a sovereign debt that has exceeded in 2011 the value of $15,000 billion.

Suggested Citation

  • Alin OPREANA & Diana MIHAIU, 2012. "Fiscal policy and the optimal gdp under a budget constrain condition," Anale. Seria Stiinte Economice. Timisoara, Faculty of Economics, Tibiscus University in Timisoara, vol. 0, pages 775-782, May.
    • Handle: RePEc:tdt:annals:v:xviii:y:2012:p:775-782
    as

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    References listed on IDEAS

    as
    1. Cochrane, John H, 2001. "Long-Term Debt and Optimal Policy in the Fiscal Theory of the Price Level," Econometrica, Econometric Society, vol. 69(1), pages 69-116, January.
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    3. Luigi Marattin & Massimiliano Marzo, 2009. "A Note on the (Un)Pleasant Arithmetic of Fiscal Policy: The Case of Italian Public Debt," Economic Notes, Banca Monte dei Paschi di Siena SpA, vol. 38(3), pages 169-183, November.
    4. António Afonso & João Tovar Jalles, 2013. "Do fiscal rules matter for growth?," Applied Economics Letters, Taylor & Francis Journals, vol. 20(1), pages 34-40, January.
    5. Gareth Myles, 2000. "Taxation and economic growth," Fiscal Studies, Institute for Fiscal Studies, vol. 21(1), pages 141-168, March.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Fiscal Policy; Budget Constrain; Optimal GDP; government borrowings;
    All these keywords.

    JEL classification:

    • G01 - Financial Economics - - General - - - Financial Crises
    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt
    • E27 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Forecasting and Simulation: Models and Applications

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