Perspectives of Fiscal Policy and Economic Growth in the Context of Sustainable Development

A special issue of Journal of Risk and Financial Management (ISSN 1911-8074). This special issue belongs to the section "Economics and Finance".

Deadline for manuscript submissions: closed (30 September 2023) | Viewed by 1652

Special Issue Editors


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Guest Editor
Faculty of Tourism and Hospitality Management, University of Rijeka, Primorska 46, Ika, Croatia
Interests: public finance; international taxation; taxation of digital economy; regional and local development

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Guest Editor
Faculty of Economics and Business, University of Rijeka, Ivana Filipovića 4, Rijeka, Croatia
Interests: institutional investors; pension systems; pension funds; sustainable investments

Special Issue Information

Dear Colleagues,

The main task of fiscal policy is to influence the economy through government spending and taxation. In economic theory, there are three main analytical frameworks that affect fiscal policy and economic growth—neoclassical growth models, endogenous growth theory, and literature emphasizing institutional conditions. Recently, the emphasis has been on developing a comprehensive human-centred model that plays a central role in the transition to sustainable development and emphasizes the role of fiscal policy and public policy reforms under conditions of growing uncertainty, inequality, and climate change. Therefore, this Special Issue focuses on both theoretical and empirical analyses of fiscal policy in addition to economic growth in the context of sustainable development.

The aim of this Special Issue is to bring together theoretical, review, and empirical concepts that help define the perspective of fiscal policy as well as economic growth based on an integrated set of economic, social, environmental, and ethical rights-based principles. Thus, we believe that the findings of this Special Issue will help practitioners and academics better understand the relationship between fiscal regimes and economic growth, with a focus on fiscal reforms for sustainability and green growth. We encourage empirical contributions that address a wide range of aspects of tax policies and the development of sustainable economies in the form of country studies or international comparisons. In addition, this Special Issue will provide a new perspective on fiscal policy trends and economic growth in a deteriorating global economic environment, including COVID -19 pandemic crises, energy crises, digitalization challenges, and worsening financial market conditions. We also encourage contributions that address other issues related to sustainable development.

Dr. Sabina Hodžić
Dr. Bojana Olgić Draženović
Guest Editors

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Keywords

  • economic growth
  • fiscal policy
  • tax policy
  • public debt market
  • sustainable development
  • green growth
  • financial market

Published Papers (1 paper)

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Research

21 pages, 1195 KiB  
Article
The Optimal Level of Financial Growth in View of a Nonlinear Macroprudential Policy Regime Model: A Bayesian Approach
by Sifundo Ntokozo Dlamini, Lindokuhle Talent Zungu and Nomusa Yolanda Nkomo
J. Risk Financial Manag. 2023, 16(4), 234; https://doi.org/10.3390/jrfm16040234 - 07 Apr 2023
Cited by 1 | Viewed by 1259
Abstract
A panel data analysis of nonlinear financial growth dynamics in a macroprudential policy regime was conducted on a panel of 10 African emerging countries from 1985–2021, where there had been a non-prudential regime from 1985–1999 and a prudential regime from 2000–2021. The paper [...] Read more.
A panel data analysis of nonlinear financial growth dynamics in a macroprudential policy regime was conducted on a panel of 10 African emerging countries from 1985–2021, where there had been a non-prudential regime from 1985–1999 and a prudential regime from 2000–2021. The paper explored the validity of the inverted U-shape hypothesis in the prudential policy regime as well as the threshold level at which excessive finance boosts growth using the Bayesian Spatial Lag Panel Smooth Transition Regression (BSPSTR) model. The BSPSTR model was adopted due to its ability to address the problems of endogeneity and heterogeneity in a nonlinear framework. Moreover, as the transition variable often varies across time and space, the effect of the independent variables can also be time- and space-varying. The results reveal evidence of a nonlinear effect between finance and growth, where the optimal level of financial development is found to be 92% of GDP, above which financial development decreases growth. The findings confirmed the Greenwood and Jovanovic hypothesis of an inverted U-shape relationship. Macroprudential policies were found to trigger the finance–growth relationship. The policy recommendation is that the financial sector should be given adequate consideration and recognition by, for example, implementing appropriate financial reforms, developing a suitable investment portfolio, and keeping spending on technological investment in Africa’s emerging countries below the threshold. Again, caution is needed when introducing macroprudential policies at a low level of the financial system. Full article
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