Volume: 2010

Issue: 01


Adrienn Erős

Article title:

Long Run Growth Effects of Fiscal Policy - a Case Study of Hungary


Theory, Methodology, Practice







One of the most debated questions of economics is whether the pace of long run economic growth
can be influenced by economic policies. The (long run) steady state growth rate of the economy is
determined by two exogenous factors according to neoclassical theory. But Endogenous growth
theories support the view that (among other factors) fiscal policy can affect economic growth
through several channels, some of which can give positive, while others negative impulses to the
rate of growth. The paper deals with the long run growth effects of fiscal policy in Hungary,
emphasising that restrictive fiscal policy actions can still have a beneficial effect on the long run
growth rate of the economy, founding such growth-oriented actions in the future, which could not
have been taken without the earlier stabilisation. An outstanding growth-fastening effect is the
lesson we can learn from comparing the fiscal data of the 1994-1996period with the 2003-2005 data.

Bibtex entry

@ARTICLE { TMP201001-11,
AUTHOR = {Adrienn Erős},
TITLE = {Long Run Growth Effects of Fiscal Policy - a Case Study of Hungary}
JOURNAL = {Theory, Methodology, Practice},
VOLUME = {5},
NUMBER = {01},
PAGES = {11-17},
YEAR = {2010}


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