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Translated Title

Contribution of Fiscal Policy to Economic Recovery

Please Note:

This article is in Slovenian.

Ključne besede

razdolževanje zasebnega sektorja, kanal prenosa državnega kreditnega tveganja, fiskalni učinek na gospodarsko aktivnost, minimiziranje stroška konsolidacije

Keywords

private sector deleveraging, sovereign credit risk channel, fiscal impact on economic activity, minimization of costs of fiscal consolidation

Povzetek

Prispevek obravnava trenutna gospodarska gibanja in vpliv fiskalne politike na gospodarska gibanja. Pregleda ozadje gospodarskih razmer, v katerih poteka fiskalna konsolidacija. Ocenjuje vpliv gospodarskih razmer na fiskalni položaj ter vpliv sedanje strategije fiskalne konsolidacije na gospodarsko aktivnost v luči glavnih tveganj, s katerimi se sooča država in za katera je videti, da so se materializirala v obliki velikega povečanja razmikov stroška zadolževanja države v primerjavi z referenčnim stroškom. Z uporabo modela dinamičnega stohastičnega splošnega ravnovesja (UMAR) je ocenjen učinek fiskalne politike na gospodarstvo ter tveganja odlašanja fiskalne konsolidacije. Predlagana je alternativna fiskalna politika in njena hitrost, ki temelji na osnovi verjetnega učinka na gospodarsko aktivnost.

Abstract

This paper assesses ongoing economic developments and the contribution of fiscal policy to it. It reviews the background economic conditions where fiscal consolidation is taking place. It evaluates the impact of economic conditions on the fiscal stance and of the current fiscal consolidations strategy on economic activity in light of the major risks that the country faces, which seems to have materialized in the form of a sizable widening of the government borrowing spread over benchmark. Using a Dynamic Stochastic General Equilibrium Model (UMAR) the effect of fiscal policy on the economy is evaluated as well as the risk of delaying fiscal consolidation. Alternative fiscal consolidation policy and speed is suggested based on assessment of its likely impact on economic activity.

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