Fiscal Policy and Economic Growth: The Case of the Federation of Bosnia and Herzegovina
Fiscal Policy and Economic Growth: The Case of the Federation of Bosnia and Herzegovina
Author(s): Marijana Galić, Elma Šatrović, Adnan Muslija, Melika ArifhodžićSubject(s): National Economy, Economic development, Fiscal Politics / Budgeting
Published by: Fakultet za upravu, pridružena članica Univerziteta u Sarajevu
Keywords: fiscal policy; economic activity; VAR; VECM;
Summary/Abstract: The purpose of this paper is to explore whether or not fiscal policy can stimulate the economic activity in the Federation of Bosnia and Herzegovina. For this purpose, the time-series data are collected in the period 2008-2014. The results suggest that a unit increase in revenue leads to a reduction in the gross domestic product in the long-run. Budgetary expenditures are found to stimulate gross domestic product only in initial period. However, results in the long-run are found to be negligible. Moreover, impulse-response function indicates there are many other determinants of gross domestic product in the Federation of Bosnia and Herzegovina besides budgetary expenditures. Therefore, the impact of fiscal policy on economic growth is just partial. Hence, development policy based on budgetary expenditures will lead to only small increase in economic output.
Journal: UPRAVA stručni časopis
- Issue Year: 2022
- Issue No: 27
- Page Range: 39-55
- Page Count: 17
- Language: English