2000年-世界发展银行全球_How_Small_Should_an_Economys_Fiscal_Deficit_Be__A_Monetary_Programming_Approach_38页_2mb

Summary of "How Small Should an Economy's Fiscal Deficit Be?" – A Monetary Programming Approach

Core Content

This working paper presents a spreadsheet-based planning model to determine the government deficit that is consistent with a set of macroeconomic objectives. The model is part of a broader macroeconomic consistency analysis, focusing on monetary programming and the interactions between the central bank and the government in financing the fiscal deficit.

The key macroeconomic objectives considered include:

• Real GDP growth
• Price-level growth
• Exchange rate evolution
• International reserve accumulation

The model calculates the maximum allowable net government borrowing flow by analyzing the central bank's balance sheet and its profit-and-loss flows over a given forecast period. It also incorporates seasonality coefficients and nominal interest rates to provide a more accurate assessment of monetary dynamics.

Main Points and Key Information

1. Model Purpose

• The model helps determine the fiscal deficit that is consistent with macroeconomic programming objectives.
• It is not a prediction model, but rather a consistency check.
• It is used in resource-planning exercises to assess whether a given deficit is feasible given the macroeconomic assumptions.

2. Model Features

• Focuses on monetary accounts and balance-of-payments forecasts.
• Uses period-end and period-average values for variables such as price level, exchange rate, and money supply.
• Incorporates central bank profit flows (often referred to as "quasi-fiscal" flows) in determining the maximum allowable government deficit.
• Accounts for seasonality in the calculation of average values (e.g., using weighted geometric averages).

3. Variables Used

The model uses the following variables:

• Y: Nominal GDP
• Y (real): Real GDP
• Y*: Nominal GDP in U.S. dollars
• $\overline{\mathfrak{p}}$: Period-average domestic price level
• $\mathfrak{p}$: Period-end domestic price level
• $\overline{\mathfrak{p}}^*$: Period-average world price level in U.S. dollars
• $\mathfrak{p}^*$: Period-end world price level
• $\overline{\mathbf{e}}$: Period-average exchange rate (domestic currency per U.S. dollar)
• E: Period-end exchange rate
• M: Period-average broad money supply
• C: Period-end currency in circulation
• B: Period-end monetary base
• $\overline{\mathbf{A}}^*$: Period-average gross central-bank external assets
• $\mathbf{A}^*$: Period-end gross central-bank external assets
• $\overline{\mathbf{L}}^*$: Period-average central-bank external liabilities
• $\mathbf{L}^*$: Period-end central-bank external liabilities
• $\overline{\mathbf{R}}$: Period-average commercial-bank reserves
• R: Period-end commercial-bank reserves
• $\overline{\mathbf{H}}$: Period-average central-bank credit to commercial banks
• H: Period-end central-bank credit to commercial banks
• $\overline{\mathbf{Q}}$: Period-average government deposit balance at the central bank
• Q: Period-end government deposit balance at the central bank
• $\overline{\mathbf{U}}$: Period-average central-bank non-monetary obligations
• U: Period-end central-bank non-monetary obligations
• $\overline{\mathbf{F}}$: Period-average central-bank credit to the government
• F: Period-end central-bank credit to the government
• T: Sum of period-end net central government obligations and central-bank non-monetary obligations to domestic financial markets
• $\overline{\mathbf{E}}^*$: Period-average net central government foreign currency obligations to external creditors
• $\mathbf{E}^*$: Period-end net central government foreign currency obligations to external creditors
• K: Government's capital position in the central bank
• Z: Government deficit (in domestic currency)

4. Forecasting Assumptions

The model requires seven groups of assumptions for each forecast year:

1. Basic macroeconomic objectives:

   • Real GDP growth rate ($\mathbf{g}_{\mathbf{y}}$)
   • Average price level growth rate ($\mathbf{g}_{\overline{\mathbf{p}}}$)
   • Average exchange rate growth rate ($g_{\overline{e}}$)

2. External accounts:

   • Gross central-bank external assets ($\mathbf{A}^*$)
   • External liabilities ($\mathbf{L}^*$)
   • Government external debt ($\mathbf{E}^*$)
   • Interest rates on central-bank assets and liabilities ($\overline{\mathbf{n}}{\mathbf{A}}^{*}, \overline{\mathfrak{n}}{\mathrm{L}}^{}, \overline{\mathbf{n}}_{\mathrm{E}}^{}$)

3. Domestic credit changes:

   • Increase in commercial-bank obligations to the central bank
   • Increase in central-bank non-monetary obligations ($\Delta U$)
   • Minimum increase in central-bank claims on the government ($\Delta^{\prime}\mathbf{F}$)
   • Minimum increase in government deposit account at the central bank ($\Delta^{\prime}\mathbf{Q}$)
   • Net increase in government capital position in the central bank ($\Delta \mathbf{K}$)

4. Nominal interest rates:

   • Nominal interest rates on central-bank assets and liabilities (e.g., $\overline{\mathbf{n}}{\mathrm{H}}, \overline{\mathbf{n}}{\mathrm{F}}, \overline{\mathfrak{n}}{\mathbb{R}}, \overline{\mathbf{n}}{\mathbb{Q}}, \overline{\mathfrak{n}}_{\mathbb{U}}$)
   • Nominal interest rate on government obligations ($\overline{\mathbf{n}}_{\mathrm{T}}$)

5. Behavioral parameters:

   • Marginal reserve ratio of commercial banks ($\mathbf{k}$)
   • Marginal money multiplier ($\mathbf{m}$)
   • Elasticity of money demand with respect to real GDP ($\mathbf{x}(\mathbf{M})$)
   • Elasticity of demand for government and central-bank domestic obligations with respect to real GDP ($\mathbf{x}(\mathrm{T})$)

6. Seasonality coefficients:

   • Coefficients for price level ($\mathbf{z}(\mathfrak{p})$), exchange rate ($\mathbf{z}(\mathbf{e})$), money supply ($\mathbf{z}(\mathbf{M})$), commercial-bank reserves ($\mathbf{z}(\mathbb{R})$), central-bank non-monetary obligations ($\mathbf{z}(\mathbf{U})$), central-bank credit to commercial banks ($\mathbf{z}(\mathbf{H})$), and central-bank external assets ($\mathbf{z}(\mathbf{A}^*)$)

7. Valuation changes:

   • Assumes changes in the valuation of central-bank assets and liabilities, including interest and exchange rate effects.

5. Model Application

• The model is used to assess the feasibility of a government deficit given macroeconomic targets.
• It determines the maximum allowable net government borrowing by combining:
  • Central bank profit-and-loss flows
  • Net external financing
  • Domestic financial market conditions
• It emphasizes consistency rather than equilibrium, and is not intended to simulate real-world macroeconomic behavior.

6. Annex Example

• An illustrative simulation for Ecuador in 1999 is provided.
• It demonstrates how the model can be applied in practice.

Conclusion

This model provides a practical tool for policymakers to assess the feasibility of fiscal deficits under a given set of macroeconomic objectives. It is particularly useful in resource-planning exercises and consistency analyses, helping to determine whether the government's borrowing needs can be met by the central bank and domestic financial markets. While it is not a predictive model, it is a valuable complement to other macroeconomic frameworks.