High taxes during crises hinder economic growth, low spending is key.
The article examines how high taxes and government spending can impact economic growth during a crisis. By studying Romanian fiscal policy, the researchers found that increased government revenues can harm consumption, investment, and employment. On the other hand, higher government expenditures can have positive effects on consumption and employment, but may not significantly impact investment in the long run. To achieve long-term growth during crises, the Romanian economy should consider adopting fiscal policies recommended by Supply-side Economics.