Broad theoretical consensus and vast empirical evidence reinforce the view that prudent fiscal policy – also advocated by the fiscal institutions of the eurozone – can support the stable long term growth. After presenting some general principles of the optimal fiscal policy, the paper...

Tax evasion reduces the efficiency of the economy as unequal opportunities of tax evasion leads to an inefficient distribution of resources. In Hungary, based on data for 2005–2006, tax evasion resulted in a transfer of 7.9 per cent of GDP from taxpayers to tax evaders. Following measures...