ROLE OF FISCAL POLICY IN STIMULATING THE ECONOMIC RECOVERY OF THE WESTERN BALKAN COUNTRIES

Abstract

The crisis caused by the coronavirus pandemic
has raised the question of the role and possibilities of fiscal
policy in mitigating its current effects and accelerating postpandemic
recovery. This issue is relevant for all economies
without exception, bearing in mind that aid packages to the
population and the economy are predominantly based on
fiscal stimulus. For this reason, the issue of the efficiency of
expansionary fiscal policy has been raised again, taking into
account the specific macroeconomic circumstances in which
most economies find themselves. Therefore, the subject of
this paper is the analysis of the optimal structure of the
expansionary fiscal policy, with particular emphasis on the
Western Balkans region, in the context of resolving the
current macroeconomic consequences of the crisis and the
possibility of providing both short and medium-term growth.
Based on the analysis of specific macroeconomic
circumstances in the countries of the Western Balkans,
conclusions were reached as to which fiscal policy
instrument can be used to achieve the previously described
goals.