FISCAL POLICY UNCERTAINTY AND ITS IMPACT ON GROWTH

The paper deals with an issue of fiscal policy uncertainty that is often omitted in the literature concerning fiscal policy effects on economic growth. It analyses both the tax uncertainty and government expenditure volatility with the aim to find out their effect on economic growth. The results confirm the economic hypotheses about the negative effect of taxation and positive effect of productive government expensiture on growth, and it also confirms our assumptions about the negative effect of fiscal policy uncertainty. In addition, beside the standard tax quota, we use the World Tax index (WTI) to approximate the taxation, which allows us to prove the results more significantly in comparison with the tax quota.