IMPACT OF CYCLICAL EVOLUTION ON BUDGET BALANCE- ROMANIA'S CASE.

History has provided sufficient evidence that economic activity does not grow linearly and economic cycles can be easily distinguished, in which periods of growth are followed by periods of recession, stagnation, rising unemployment and widening budget deficits. Cyclical evolution impact on macroeconomic equilibrium requires us to move to a multiannual approach to budget balance and think about adjustments for the fiscal policy mix over the economic cycle, i.e. to pursue higher deficits in periods of recession as a result of tax incentives and some public investment expenditures absolutely necessary to resume growth and the deficits and public debt accumulated will be reduced in further periods. [ABSTRACT FROM AUTHOR]