Optimal fiscal policies in booms and recessions : a case study for Slovenia

Blueschke, Dmitri (author), Weyerstrass, Klaus (author), Neck, Reinhard (author), Verbič, Miroslav (author)

Optimal fiscal policies are determined for Slovenia for the next few years under alter- native assumptions about global developments. We construct a baseline scenario, two scenarios with a recession and two with a boom, each with a demand side and a sup- ply side shock. We use the macroeconometric model SLOPOL12 and assume an inter- temporal objective function for Slovenian policy makers containing the main targets derived from a survey among policy makers as arguments. Approximately optimal policies are calculated for all scenarios. Fiscal policies are characterized by an une- qual design for dealing with the trade-off between output stabilization and budgetary sustainability: instruments with demand side and supply side effects (direct taxes and public investment) are used for output and employment stabilization, while govern- ment consumption and other instruments with only demand side effects are assigned to budget consolidation. The results are rather similar in the different scenarios and only mildly counter-cyclical.

• Language: English
• Keywords: macroeconomics, fiscal policy, optimization, Slovenia, dynamic optimization
• Work type: Article
• Typology: 1.01 - Original Scientific Article
• Organization: EF - School of Economics and Business
• Publication status: Published
• Publication version: Version of Record
• Year: 2025
• Number of pages: Str. 499 - 526
• Numbering: Vol. 49, iss. 4
• PID: 20.500.12556/RUL-179901
• UDC: 330.1
• ISSN on article: 2459-8860
• DOI: 10.3326/pse.49.4.1
• COBISS.SI-ID: 259931139
• Publication date in RUL: 26.02.2026

Record is a part of a journal

• Title: Public sector economics
• Shortened title: Public sect. econ.
• Publisher: Institute of Public Finance
• ISSN: 2459-8860
• COBISS.SI-ID: 1847182

Licences

• License: CC BY-NC 4.0, Creative Commons Attribution-NonCommercial 4.0 International
• Link: http://creativecommons.org/licenses/by-nc/4.0/
• Description: A creative commons license that bans commercial use, but the users don’t have to license their derivative works on the same terms.

Secondary language

• Language: Slovenian
• Keywords: makroekonomija, fiskalna politika, optimizacija, Slovenija

Projects

• Funder: Other - Other funder or multiple funders
• Project number: I 2764-G27
• Name: I 2764-G27

• Funder: ARIS - Slovenian Research and Innovation Agency
• Project number: 630-31/2016-1
• Name: 630-31/2016-1