Fiscal Policy Effects on Economic Growth

Fiscal policy has been considered to be one of the most common and effective methods for state regulation of the economy in general and economic development in particular. Unfortunately, it has been reduced to state debt management or reactive economy policy during the last ten years. Due to contradictional specifics of fiscal policy impact on economic development for the long-run, there is a particular interest to the most and the least effective impacts on the economy for the long-run fiscal methods. Through statistical analysis was tested the existence and strength of correlation effects of fiscal policy on economic development. However, there is also a particular interest in the structural changes in the economy and stimulation of certain types of activity in the economy due to fiscal policy. These effects are better to be analyzed rather then statistically examined. Meanwhile, fiscal policy includes a wide set of tools for tax regulation, public procurement and redistribution of state and regional budgets. One of the most common tools, especially in Ukraine, is administrative regulation. Despite its strength, statistics show no link between such policy and GDP growth. Such results mean, that fiscal policy is mostly used ineffectively and has to be reconsidered.