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Theoretical and Applied Economics
No. 9 / 2006 (504)

Empiric Study about the Mix Fiscal Policy – Economic Development

Alexandru Sergiu Ocnean
Universitatea de Vest din Timisoara

Abstract. Economic development is one of the primary objectives of any government. Fiscal policy represents one of the most effective tools that government authorities could use in order to influence the economy. Having this in mind, this paper focuses on the connection between economic development and fiscal policy and proposes an empirical study based on a sample of 21 European countries. Using a simple pool data model, we tried to distinguish the relations between the evolution of GDP per capita, as a proxy for economic development, and the evolution of three fiscal policy variables, namely the tax burden, the public expenditure to GDP ratio and the budget deficit to GDP ratio.

Keywords: fiscal policy; economic development; pool data models.

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Marin Dinu

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