Macroeconomic effects of fiscal policy in Albania: A Svar approach

Fiscal policy is an important determinant of economic developments and often government decisions on spending and taxes are assigned a crucial role in speeding up or slowing down economic growth. The recent global financial and economic turmoil highlighted the importance of fiscal stimuli in enabling economic recovery, in coordination with monetary policy. This paper investigates the macroeconomic effects of discretionary fiscal policy in Albania, with the aim of identifying the most effective type of policy in bolstering economic growth, while exerting low to moderate pressures on inflation.