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FORECASTING AND MANAGING FEATURES OF BUDGET DEFICIT IN TRANSITIONAL ECONOMY

Journal: University Economic Bulletin. Collection of scientific articles of scientists and post-graduate students (Vol.1, No. 25)

Publication Date:

Authors : ;

Page : 179-185

Keywords : long-term budget deficit; methods of the budget deficit management; transition-economy countries; stabilization of economic conditions; forecasting; vector autoregression models;

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Abstract

The object of study is budget deficit in countries with transitional economy and methods of its forecasting and management. The aim or the study is a comprehensive analysis of the features of forecasting and management of long-term budget deficits, especially in countries with transitional economy and distinguish the basis of priority measures to reduce the growth rate of the budget deficit and stabilize the economic situation of Ukrainian economy. The study used general scientific methods of analysis and synthesis, methods of grouping, detailing, generalization and systematization of data, as well as economic and mathematical methods. The results. Author determined the main causes of unbalanced budget appearing in countries with transitional economy; studied ways to overcome long budget deficit and justified those that can be used in Ukraine; analyzed forecasting and management features of budget deficit in countries with transitional economy, that allows to build adequate econometric model for forecasting and conducting of scenario analysis of changes in the budget deficit for the Ukrainian economy, depending on the effect of external shocks and changes in key macroeconomic indicators and to develop on this basis priority measures which are necessary for stabilization of economic situation in the country. The results can be used to form government programs and strategies for public finances development in terms of macroeconomic instability, as well as to forecast budget deficit in short and medium terms. Conclusions. Critical analysis of foreign experience allows distinguishing the key measures of reducing the growth rate of the budget deficit and stabilization of the economic situation in Ukraine. One of such measures is a full medium-term planning of budget indicators that should be based on realistic forecast, that causes necessity to develop of econometric methods and models that would allow to obtain forecasts with high accuracy, taking into an account all the relationships with key macroeconomic indicators. In particular, such models may include a vector autoregression model, which was confirmed by the construction and implementation of this type of model the budget deficit forecasting in Ukraine. The study generally confirmed that the medium-term budget forecasting and planning policies that form the basis of Convergence programs is an effective method of managing the budget deficit in terms of economical and structural transformations that should help to reduce the growth rate of the budget deficit and to achieve stabilization of the economic situation in Ukraine.

Last modified: 2016-07-21 05:06:37