Fiscal sustainability of the Visegrad Group countries in the aftermath of global economic crisis

Abstract

The article investigates the sustainability of fiscal policies of the Visegrad Group countries (Poland, Czech Republic, Hungary and Slovakia) in the years 1996- 2015 using statistical and econometric analysis methods. Special attention is given to the identification of subperiods of low sustainability within the framework of the Markov switching cointegration model. The results of the research show that the global economic crisis had little effect on the fiscal stance of the analysed countries, because their expansionary, countercyclical fiscal policies were promptly replaced by more restrictive policies. However, further improvements in fiscal discipline are needed to ensure sufficient space for fiscal reaction in the future