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Impact of Fiscal Adjustment on Growth in Transition Economies

Cheema, Nadir (2015) 'Impact of Fiscal Adjustment on Growth in Transition Economies.' Unpublished. (Unpublished)

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Abstract

This paper explains public policy endogenous growth models and estimates effects of fiscal adjustment on growth in twenty-six transition economies. It uses annual data on fiscal variables and growth during 1992-2001. Expansionary fiscal contractions is observed in transition economies, which can be explained by factors specific to transition economies. These non-Keynesian effects of fiscal policy during adjustment are termed as creative destruction in transition economies as these economies inherit inefficiencies and underutilized capacity. Most of the transition economies underwent fiscal consolidation in early 1990s, it included post-communist countries. This paper analyses the effect of fiscal consolidation on growth using a fixed-effect model. The paper also provides graphical analysis of expenditure compositions, which is helpful in explaining the econometric estimations.

Item Type: Articles
SOAS Departments & Centres: Faculty of Law and Social Sciences > Department of Economics
Depositing User: Nadir Cheema
Date Deposited: 12 Nov 2015 11:27
URI: http://eprints.soas.ac.uk/id/eprint/21240

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