Budget models


Output Track A4

Working papers

> DECOSTER, A., VAN DER WIELEN, W., A4: Begrotingsnormen in een federale staat, KULeuven, 2013, 39 pp. (.pdf)

> VAN DER WIELEN, W., A4: Assesing fiscal rules and sustainability: beyond the threshold, KULeuven, 2013, 21 pp. (.pdf)

> DECOSTER, A., VAN DER WIELEN, W., A4: Begrotingsnormen in een federale staat. Een panacee voor oplopende tekorten en schuld: mythe of realiteit?, KULeuven, 2013, 38 pp. (.pdf)


> VAN DER WIELEN, W., A4: Allocating Stochastic Public Expenditures under Revenue Volatility: The Role of Stricts Budget Constraints, KULeuven, 2014, 37 pp.

>VAN DER WIELEN, W., A4: Uncertainty and the Preferred Instrument for Fiscal
Discipline under Multitier Government, KULeuven, 2014, 33 pp.

Research theme

This track focuses on budget models and fiscal rules.
The central research questions concerning fiscal rules are: In case a budget norm is proposed by the EC, what are the optimal budgeting methods to reach the goals and how is this affected by budgetary uncertainty (cfr. Weitzman prices versus quantity approach)? What are the consequences of excessive deficits? How can a budget norm be implemented at the regional level? What are the efficiency and equity implications (cfr. Track A1)? How should temporary budget deficits be handled during interregional negotiations? How can these be allocated to the regions and how can the federation be sure the regions comply?
An integrated model containing the most important expenditures and revenues categories will be set up. During this process we build on the insights of the other tracks concerning the marginal tax rates and appropriate elasticities. This model needs to take into account the stochastic character of the revenues and expenditures and the underlying aggregates which influence the tax base. The model will be adapted to the 6th State Reform. A user friendly user-interface for his model will be developed. The goal is to provide the principal with an efficient tool to set up the budget and control for the stochastic behavior of the underlying components.

Promotors: A. Decoster en S. Proost
Scientific personnel: Wouter van der Wielen