Data on European Economics Reported by Rijad Kovac and Colleagues (Fiscal policies in the Federation of Bosnia and Herzegovina: are spending or revenue measures more effective?): Economics – European Economics

2023 JAN 31 (NewsRx) -- By a News Reporter-Staff News Editor at Insurance Daily News -- New research on Economics - European Economics is the subject of a report. According to news reporting out of Sarajevo, Bosnia and Herzegovina, by NewsRx editors, research stated, “We examine the effectiveness of different fiscal policies in the Federation of Bosnia and Herzegovina (FBiH). For this purpose, we use a structural macroeconomic model for the FBiH.”

Financial support for this research came from Institute for Advanced Studies Vienna.

Our news journalists obtained a quote from the research, “In this model, GDP in the Federation is influenced by world demand and by domestic demand in the Federation. Domestic demand comprises consumption of private households, public consumption, and gross fixed capital formation. Employment depends positively on GDP and negatively on the tax wedge, i.e., the net wage plus social security contribution rates (including the unemployment insurance), and the personal income tax rate in the Federation. The latter allows the analysis of the impact of changes in social security contribution rates or in the income tax rate in the Federation of Bosnia and Herzegovina. The following Federation-specific policy instruments are implemented in the model for the FBiH: Pension funds contribution rate in FBiH; contribution rate for health insurance in FBiH; contribution rate for the unemployment insurance in FBiH; benefits from social security; direct tax rates (income tax rate, corporate tax rate); public consumption in FBiH. Our results show that policy measures that reduce the tax wedge on labour income are highly effective in stimulating employment. Due to the large elasticity of imports with respect to demand, pure demand-side measures have little impact on real variables, indicating that a small open economy like the Federation of Bosnia and Herzegovina has only little scope for influencing macroeconomic developments with pure demand management policies. Our results confirm earlier theoretical and empirical studies showing that the labour market can best be influenced positively by reducing the tax wedge.”

According to the news editors, the research concluded: “The multipliers of income tax reductions are larger and oscillate more than the effects of the other fiscal policy measures.”

This research has been peer-reviewed.

For more information on this research see: Fiscal policies in the Federation of Bosnia and Herzegovina: are spending or revenue measures more effective? Empirica, 2023:1-34. Empirica can be contacted at: Springer, Van Godewijckstraat 30, 3311 Gz Dordrecht, Netherlands. (Springer - www.springer.com; Empirica - http://www.springerlink.com/content/0340-8744/)

Our news journalists report that additional information may be obtained by contacting Rijad Kovac, Federal Institute for Development Programming, 71000 Sarajevo, Bosnia and Herzegovina.

The direct object identifier (DOI) for that additional information is: https://doi.org/10.1007/s10663-022-09562-9. This DOI is a link to an online electronic document that is either free or for purchase, and can be your direct source for a journal article and its citation.

Publisher contact information for the journal Empirica is: Springer, Van Godewijckstraat 30, 3311 Gz Dordrecht, Netherlands.

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