Taking into consideration the importance of the sustainability of public finance, in the present study we calibrate and simulate a three-sector Greiner, Semmler and Gong (2004) model for the Romanian economy. The simulations were performed considering three fiscal regimes, defined according to the way the government expenditures were financed. By calibrating the model to the Romanian economy, we determine for each fiscal regime the optimal tax rate, that is the tax that maximizes the long-run growth rate, and we forecast the evolution of the real GDP.

The present study emphasizes the importance of human capital in economic growth. We simulate possible growth paths assuming that the Romanian economy behaves according to the hypothesis of the Uzawa-Lucas model. By calibrating the model to the Romanian economy, we are able to forecast the evolution of the Romanian GDP and the proportion of human capital which will be used in the production of goods and services. Although the population growth rate is considered to be zero, the average real GDP growth rate is around 6 % due to the human capital accumulation, which improves the quality of labor.