Asymmetric Transmission Channel In Eurozone: The Case Of Romanian Fiscal Policy

This study makes an analysis for the way in which the predominantly pro-cyclical national fiscal policies have acted as a transmission channel of the Eurozone asymmetries. The empirical evidences have demonstrated the less developed countries desiring to join the Eurozone will be the most affected by the asymmetric impact of the fiscal policy's procyclicity, however, the contagion effects may also negatively reflect upon the developed countries. In the second part, we make an analysis for the performance of the fiscal management in Romania based on the estimate made for the structural budget balance indicator, by means of which the discretionary degree of the Romanian fiscal and budgetary policy is assessed, the also the degree to which the Romanian fiscal and budgetary policy has or has not been inconstant, cyclic or not and also the extent to which it is or it is not anchored on a medium term. We consider that the fiscal policy procyclicity in the case of Romania will be the most important factor which will affect Romanian economy after the euro zone admission. In the end, the study proposes a set of solutions and recommendations.