engleski

WHAT KIND OF FISCAL POLICY DO WE NEED?

Market mechanism can not perform all economic functions by itself. Therefore fiscal policy (or public sector policy) must direct, correct and complement functioning of the marketplaces. Today we live and work in a globalizing world, which affects fiscal policy as well. Fiscal policy was also changing under certain condition in the past, but it is to be questioned what role fiscal policy has today when (new) globalizing trends affect national economies. As in other countries, many of croatian economical challenges are linked with public finances, i.e. with creation and implementation of appropriate fiscal policy. Such fiscal policy should aim at economical goals which will enable fast growth and reforms of the economy. Sustainable (reformed) fiscal policy could be in parallel analysed from two standpoints: a) Tax system should be (re)formed b) Level of public expenditures should be constantly monitored, in order not to endanger development of the economy. It is intention of this research to analyse fiscal policy measurements and suggest alternatives for their implementation and improvement. Successful fiscal policy depends on decrease of relative share of public expenditures in GDP, rationalization of public government, achievement of sustainable budget deficit and fiscal decentralization.

Fiscal policy; Tax policy; Globalization; Public expenditures; GDP; Budget deficit; Fiscal decentralization

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