This paper proposes a dynamic politico-economic theory of debt, government finance and expenditure. Agents have preferences over a private and government-provided public good, financed through labour taxation. Subsequent generations of voters choose taxation, government expenditure and debt...

The ‘comprehensive socialization of investment’ was a key policy goal of The General Theory. And yet, empirically, we have seen a decline in the public investment share in most OECD countries since the economic crisis of the 1970s. In this paper we study several issues concerning...

This paper explores the relationship between fiscal deficit, trade deficit and private consumption in European countries in the years 1970-2010. The aim of the study is to test empirically the validity and rationale of the Keynesian proposition (conventional view or Twin Deficits hypothesis) and...

A new method is proposed to measure the underlying ("structural") surplus/deficit of a government budget. It does not rest on the notion of "full-employment GDP" but aims at modelling the fiscal behavior of the government in the widest sense. The basic idea is to identify what is systematic in...

Since its publication over 60 years ago, Keynes' General Theory of Employment, Interest and Prices (1936) has substantially influenced both macroeconomic theory and popular opinion about what governments can and should do. However, the extent to which counter-cyclical stabilization has actually...

State budget is the fundamental document of state economy. State budget balance reflects state economy. Deficit reported in a state budget in the long-term threatens long-term effective functioning of a state. This article aims at pointing out risks arising in the public finance of Slovakia and...

The article demonstrates the importance of incorporating contingent liabilities into fiscal analysis. When explicit expenditures are shifted off budget or replaced by guarantees, achieved fiscal balance is an illusion. In the Czech Republic, fiscal adjustment may have been overstated by some...

Since the beginning of the crisis, which occurred in 2008, the European Union has taken a series of measures to stem the financial crisis. One of these has been the Fiscal Compact. The Fiscal Compact is an International Treaty signed by 25 countries of the European Union. Ever since it was...

The article analyzes the need, role and principles underlying good governance in the European Union, namely: openness, participation, accountability, effectiveness and cohesion. Subsequently, the research continues with the definition of the fiscal federalism concept, focusing on the benefits of...