Abstract
Abstract With the recent economic recession, fiscal policy was regarded with more interest since it was expected to be effective in the economic recovery. Given the limited scope of monetary policy to provide additional stimulus, fiscal policy has became the most important tool for stabilizing business cycles. This paper assesses the cyclical behaviour of fiscal policy in Romania by calculating the structural deficit and the fiscal impulse. The period considered for this analysis is 2000-2013. According to the results obtained fiscal policy was generally procyclical except 2013. In the period of economic growth 2006-2008, the fiscal policy was highly procyclical and it continued to be procyclical during the economic recovery of 2009-2012 because of the necessity to reduce the budget deficit and because of the financing constraints. The procyclicality of fiscal policy during booms have consequences on the long term sustainability of fiscal policy.
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