Romania's Budget Crisis: Fiscal Policy Key to Economic Recovery
The article discusses how countries like Romania can use fiscal policy to manage economic crises. By adjusting taxes and spending, governments can control economic activity during different phases of the business cycle. In Romania, factors like tax evasion and a large shadow economy make it challenging to stabilize the economy. The key is to focus on the structural budget balance, which looks at stable revenue and spending excluding cyclical fluctuations. This helps determine the most effective fiscal policy for each economic situation.