Public Finances and Fiscal Policy at A Crossroad ͵- What Is Next?
Journal
POLITICAL THOUGHT
Date Issued
2017
Author(s)
Abstract
Owing to the global economic crisis and the European debt crisis, the necessity
of sustainable public fi nances and the need for creati ng a balance between shortterm stabilizati on objecti ves and long-term fi scal sustainability have become
urgent issues. In such a situati on when public debts increase rapidly, economic
growth is uncertain and confi dence in the internati onal fi nancial markets is
sti ll shaken, questi ons related to public fi nances and fi scal sustainability have
become signifi cant, and are hence the subject of numerous analyses, studies and
books. This is a parti cularly important issue for the EU member states and, all
the more, for the countries planning to integrate into the EU, since it has shown
that in case of global economic disrupti ons, the fi scal policy is the fi rst “stumbling
block” to sustainable macroeconomic stability of the EU. Regarding this global
Trenovski Borce
PUBLIC FINANCES
AND FISCAL POLICY AT A
CROSSROAD ͵ WHAT IS NEXT?
УДК: 336.02:338.124.49497.7)
336.1:338.124.4(497.7)
Изворна научна статија
“What can be added to the happiness of a man who is in health,
out of debt, and has a clear conscience?”
Adam Smith
42 POLITICAL THOUGHT ͳ 53 JUNE 2017
trend, the Republic of Macedonia, a small and open economy, has not been left
aside. The strong fi scal expansion in the country in the last several years has put
its fi scal sustainability to a test, considering the fast increase of indebtedness.
Taking into considerati on the great signifi cance of fi scal sustainability for
the macroeconomic stability of the country, this paper focuses on the public
fi nances, fi scal policy and fi scal sustainability of Macedonia, given the latest
economic disturbances: the global crisis and the following period. Public fi nances
and the directi on of fi scal policy will be analyzed by elaborati ng the trends in the
main fi scal variables and the previous empiric research in order to demonstrate
the need for adjustment, change of course and increased effi ciency of fi scal
policy. This is parti cularly important in view of the pace of the debt increase, its
structure, as well as fi scal policy effi ciency which are among the main indicators
for assessment of Macedonia`s stability on the path to the EU.
of sustainable public fi nances and the need for creati ng a balance between shortterm stabilizati on objecti ves and long-term fi scal sustainability have become
urgent issues. In such a situati on when public debts increase rapidly, economic
growth is uncertain and confi dence in the internati onal fi nancial markets is
sti ll shaken, questi ons related to public fi nances and fi scal sustainability have
become signifi cant, and are hence the subject of numerous analyses, studies and
books. This is a parti cularly important issue for the EU member states and, all
the more, for the countries planning to integrate into the EU, since it has shown
that in case of global economic disrupti ons, the fi scal policy is the fi rst “stumbling
block” to sustainable macroeconomic stability of the EU. Regarding this global
Trenovski Borce
PUBLIC FINANCES
AND FISCAL POLICY AT A
CROSSROAD ͵ WHAT IS NEXT?
УДК: 336.02:338.124.49497.7)
336.1:338.124.4(497.7)
Изворна научна статија
“What can be added to the happiness of a man who is in health,
out of debt, and has a clear conscience?”
Adam Smith
42 POLITICAL THOUGHT ͳ 53 JUNE 2017
trend, the Republic of Macedonia, a small and open economy, has not been left
aside. The strong fi scal expansion in the country in the last several years has put
its fi scal sustainability to a test, considering the fast increase of indebtedness.
Taking into considerati on the great signifi cance of fi scal sustainability for
the macroeconomic stability of the country, this paper focuses on the public
fi nances, fi scal policy and fi scal sustainability of Macedonia, given the latest
economic disturbances: the global crisis and the following period. Public fi nances
and the directi on of fi scal policy will be analyzed by elaborati ng the trends in the
main fi scal variables and the previous empiric research in order to demonstrate
the need for adjustment, change of course and increased effi ciency of fi scal
policy. This is parti cularly important in view of the pace of the debt increase, its
structure, as well as fi scal policy effi ciency which are among the main indicators
for assessment of Macedonia`s stability on the path to the EU.
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