Fiscal policy is an important government tool for managing the economy, having the ability to affect the total amount of output produced - GDP. Changes in the level and composition of government spending, taxation or other instruments of fiscal policy have impact on aggregate demand, the pattern...

The present paper examines the impact that budget deficits exercise on economic growth in the United States. Using a simple growth model that includes a variety of public policy variables, we provide Instrumental Variables (IV) estimates that indicate growth in the United States over time. The...

Many states in India have time and again elected a multiparty or a coalition government. Research so far has shown that these differences in political cohesiveness of the ruling political entity has influenced the spending choices of the state governments. However, the evidence is not completely...

Creation of optimal tax and budget systems is one of the Difficult problems of economic science. One of the most important areas of tax reform is to develop a tax code in the aspect of optimal tax gravity. The new tax code - a step to improvement, since a number of reduced taxes and simplified...

This paper presents an empirical analysis of the relationship between fiscal illusion and the shadow economy for 104 countries over the period 1989–2009. We argue that both unobservable phenomena are closely linked to each other, as the creation of a fiscal illusion may be helpful if...

The aim of the paper is to analyze changes in taxation and their impact on economic growth in the European Union. The analysis is performed on adjusted annual panel data of 24 European Union countries in a period 1995–2008. Panel regression with fixed effects is used as a basic method of...

The objective of this paper is to identify and explain effects of a government spending shock. After accounting for large military events, I find that in response to a structural unanticipated government spending shock, output, hours, consumption and wages all rise, whereas investment falls on...

Using a large information approach and full Bayesian VAR techniques, we study the economic effects of fiscal policy shocks in the U.S. over the last five decades. We find that omitted variables can explain the well known sample instability of the estimates for the fiscal multiplier. We also find...

This article deals with a tax burden in the European Union in as financial and economic crisis has impacted also on tax systems in the European Union. Governments´ tax measure aims to consolidate public finance and promote an economic growth. The article provides empirical evidence on a shift...

The complexity of today’s global economic environment increases importance of identifying and understanding the key factors affecting economic growth. This paper deals with effect of changes in tax burden on economic growth and provides direct empirical evidence in the European Union as...