Fiscal Policy Reaction in the Short Term for Assessing Fiscal Sustainability in the Long Runin Central and Eastern European Countries

The aim of this paper is to analyze how the primary government balance in Central and Eastern European countries reacts in the short term, in order to assess fiscal sustainability in the long run. For the purpose of this study, a fiscal reaction function is used. Given the different orders of integration of the variables involved in the model, modified forms of the fiscal reaction function are considered. The results show that for Bulgaria, Czech Republic, Estonia, Hungary, and Lithuania fiscal policy reacts as expected – in the sense that governments have the ability to run a primary surplus – in the short term. This action makes fiscal sustainability easier to achieve in the long run. On the other hand, for Latvia, Poland, Romania, and Slovakia, sustainable fiscal policy will be more difficult to attain given the opposite response of governments to public debt shocks. In these countries, severe fiscal adjustments should be made in order to reach fiscal sustainability in the long run.fiscal sustainability, fiscal reaction function, primary balance, public debt, budget balance

What do we know about the government interventions in the economy?

In the context of the increasing budget deficit and public debt, on one hand, and the need to restore economic growth without compromising financial stability and fiscal sustainability on long term, on the other hand, governments must undertake severe measures concentrated especially on expenditure and secondly on revenue. The paper aim is to present what it is already know regarding the government interventions in the economy and its effects based on an investigation of the main findings from the literature review. This gives usefulinformation on the adequate mix of policies and instruments to correct the economic distortions

Economic sentiment perceptions during COVID-19 pandemic: A European cross-country impact assessment

An increasing body of recent literature focuses on how stock market investor sentiment fluctuates during the pandemic. However, a topic insufficiently addressed is related to investigating the changes occurred in the economic sentiment and expectations during COVID-19 pandemic, as a broader concept than stock market investors' perception and expectations. The paper investigates the impact of COVID-19 pandemic on the economic sentiment pattern in European Union countries, through two complementary research approaches: an exploratory data analysis technique represented by a hierarchic agglomerative clustering and a probabilistic GLM panel regression framework. Several official survey-based economic sentiment indices (Economic sentiment indicator, Employment expectations index, Composite leading indicator, Business confidence index, Consumer confidence index) are included in the empirical analysis to comprehensively reflect businesses and consumers' current economic and employment perceptions and expectations on future developments. The clustering solution indicates increased heterogeneity among European countries and no stable group. The sentiment related to the employment consequences of the COVID-19 crisis records the sharpest fluctuation and is reflected in countries' classification. The panel regression findings reveal that the number of new deaths is the most influential COVID-19 proxy variable, as it determines the evolution of most sentiment indicators

Financial Strategies for the Romanian Local Public Administration

<p>Public administration reform at all governmental levels constitutes an important component of the transformation process from a centralized system to democratic governance. This process involved important legislative and institutional changes in order to fulfill the principles of a market economy and the European Union standards based on transparency, predictability, accountability, adaptability and effectiveness. Therefore, in a continuing extension of the citizens’ needs, Romanian public administration reform, especially at local level, is concentrated on quality of public services based on citizens’ needs and increased performances in the context of a necessary decrease of budget expenditure, taking into consideration the actual financial constraint. In this context, it is useful to investigate the financial strategies of the local public administration based on the Romanian experiences that consisted in important public resources decline because of the financial crisis.</p