Re-modeling the Romanian Fiscal Policy under the Terms of the Economic Crisis

This paper brings arguments for the necessity to re-think
the modality to analize and interpret the Romanian fiscal policy, under
the terms of the future adheration to the Euro Zone. Under these terms,
this study estimates the structural budget deficit, considering this
indicator as one of the most relevant for assessing the performance of the
fiscal management, and also the extent to which the Romanian fiscal
policy is prepared to act as a sole instrument which can stabilize the
national economy after entering the Euro Zone. The work is structured as
it follows: (i) estimate for the potential GDP and for the output gap by
means of the production function method and by the use of the Hodrick-
Prescott filter; (ii) estimate for the cyclic budget component, based on the
deficit sensitivity (using the elasticities of the government revenues and
purchases related to the GDP) and on the value of the output gap and,
subsequently, of the structural budget component. Finally, the work
mentions a series of conclusions and recommendations regarding the
methodological re-construction of the assessment for the fiscal policy’s
efficiency