Fiscal austerity and economic growth in CEE countries

This article presents the effects of the fiscal austerity on the growth of GDP for the countries in Central and Eastern Europe. Austerity has become the watchword of all heads of state or government. Its effects are being felt increasingly in the pockets of citizens, including, or perhaps we should say especially in Central and Eastern European countries. Are the austerity measures taken the right answer to the problems currently facing the region? The paper’s findings invalidate the assiduously promoting by Eastern European countries of the fiscal austerity, this actually leading to a decrease in economic growth

Internal causes of economic difficulties for the companies

The difficulties for businesses have not, necessarily, a financial component, though, regardless of origin, in the end, they become a financial expression. Most often, poor performance is partly as a source of financial problems itself, it is the consequence of economic imbalances, technical, commercial and human at the company level or a tightening economic, legal, social or competitive environment in which it evolves. Each of these factors has a different importance on the normal activity of the enterprise, which may not continue in the future unless they act meaning fully to remove difficulties.  With the first signs of the worsening situation of the enterprise, there is a risk of not being able to be redressed, developing a cumulative process of damage by propagating and amplifying the difficulties, which lead to its disappearance

Exchange rate and trade: J-curve in European Union

The EU economy is experiencing a severe recession amid the global crisis, and although in other regions began to appear mild signs of recovery, in EU countries are recorded a continuously worsening. In many European states, the economic contraction is a consequence of the decrease in net exports component of GDP. The aim of the article is to analyze the situation in which the EU chooses to devalue its currency to increase exports. We found that, the depreciation of the Euro, has no influence on exports and that in EU, it is not expressed a J-curve effects

The inflation and economic growth: evidence from Romania

The main purpose of this study is to establish the existence (or not) of a relationship between inflation and economic growth in Romania, the study lasting between 1970-2013. The methodology used in this study is the one specific to time series: structural break test using Zivot-Andrews test, the stationarity test using Augmented Dickey-Fuller (ADF), and then Granger causality testing. Test results showed that for the analyzed period, there was a cointegrating relationship between inflation and economic growth for Romania. Finally, to establish the econometric model of the two variables, it has been developed an ARDL model with two different periods of lag

The Nexus between Economic Growth and Public Spending in Eastern European Countries

This study analyses the relationship between governmental expenditure and economic growth rate for 8 Eastern-European countries with data for 1995–2014 using the ARDL model. The main goal of the present study is to test the presence of a non-linear - Armey Curve type - relationship between the government size and economic growth and also to find an optimal level of public spending which maximizes economic growth. Our results reveal the occurrence of a significant cointegration of public spending and economic growth for all considered countries and show that the current share of public spending within the Gross Domestic Product (GDP) exceeds the optimal level calculated for the three countries for which the Armey-type phenomenon occurs. Also, the results suggest that the optimal percentage of governmental spending varies between 37 % and 41 % and the present level is higher than the optimal level for Bulgaria, Hungary and Romania. The outstripping of the optimal level may conclude to the idea that the weight of public sector should be slightly decreased in these countries since the public sector is not able to efficiently cope with its resources. Based on the study results, the weight of public expenditure should be reduced while the efficiency of public spending programs should be increased

International analysis of the dynamics of public expenditure in modern society

In this article is a brief analysis of the evolution of public expenditure. Data available for analysisstarting from eighteenth century to 1980. The main objective of this article is to highlight the qualityof determinant but also factor determined of public spending in history

The evolution view on the insolvency phenomenon in post-December Romania

The purpose of this article is to present the evolution of the phenomenon of insolvency in post communist Romania. An important feature of a market economy it is the active selection mechanism by which solid and efficient firms supersede the least effective and the goods and new activities to replace the old. Present article attempts describes the provisions of the Romanian insolvency law, is investigating the facts existing and possible remedies that could lead to increased competitiveness and functionality of the Romanian economy

Public sector pay policy in East European countries

The public sector salaries in general, but especially in the civil administration has been and will be a topical issue, highly controversial, and with a permanent presence in the media. This article presents the developments that took place in wages of Eastern European public servants as a result of the international financial crisis

Public sector pay policy in East European countries

The public sector salaries in general, but especially in the civil administration has been and will be a topical issue, highly controversial, and with a permanent presence in the media. This article presents the developments that took place in wages of Eastern European public servants as a result of the international financial crisis

THE INSOLVENCY PHENOMENON AND THE NON PERFORMING LOANS

The number of bankruptcies increases by 50% in the period 2008-2011, at over 20,000 cases. Most bankruptcies are in the sector of trade and services, where falling demand and increased financial blockage cause serious financial problems. This article presents comparatively, the evolution of the number of bankruptcies, total and by main industry. Also it develops an econometric model to determine the effects of nonperforming loans in RON and foreign currency on the number of bankruptcies