Fiscal policy, the main tool to influence the capital markets' strength

  • Authors:

  • Mihaela Göndör;Vasile Paul Bresfelean

  • Affiliations:

  • Department of Finance, Petru Maior University, Targu Mures, Romania;Business Information Systems Department, Babes-Bolyai University, Cluj-Napoca, Romania

  • Venue:
  • AIASABEBI'11 Proceedings of the 11th WSEAS international conference on Applied informatics and communications, and Proceedings of the 4th WSEAS International conference on Biomedical electronics and biomedical informatics, and Proceedings of the international conference on Computational engineering in systems applications
  • Year:
  • 2011

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Abstract

Based on the fiscal & monetary theories derived from the economic works mentioned in the present working paper, we intend to argue that far from being a factor with small influence, as shown in literature, fiscal policy is a major factor influencing capital markets, its influence being found in the behavior of all factors mentioned as important for market capital strength, like interest rates, inflation rates and exchange rates. The aim of this work is to examine the effects of fiscal policy on the strength of capital markets. We also employ machine learning techniques in our research outlining the average daily trading on Bucharest Stock Exchange (BVB).