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Types of Government Deficit in Respect of Fiscal Decision-Making

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  • Przybylska-Mazur Agnieszka

    (University of Economics in Katowice, Katowice, Poland)

Abstract

Fiscal policy includes the government decisions on the size of taxes that affect the size of the government deficit. There are different types of government deficit. The aim of the analyses is to examine the relation between the type of deficit and the optimal level of tax rate. In this article we verify the hypothesis that the type of deficit considered affects the tax rate. For the hypothesis verification, we use the feedback rules that are the solution of the quadratic-linear problem.

Suggested Citation

  • Przybylska-Mazur Agnieszka, 2018. "Types of Government Deficit in Respect of Fiscal Decision-Making," Financial Sciences. Nauki o Finansach, Sciendo, vol. 23(2), pages 60-74, June.
    • Handle: RePEc:vrs:finsci:v:23:y:2018:i:2:p:60-74:n:5
    DOI: 10.15611/fins.2018.2.05
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    References listed on IDEAS

    as
    1. Benigno, Pierpaolo & Woodford, Michael, 2012. "Linear-quadratic approximation of optimal policy problems," Journal of Economic Theory, Elsevier, vol. 147(1), pages 1-42.
    2. Samuel O. Okafor & Olisaemeka D. Maduka & Ann N. Ike & Benedict I. Uzoechina & Celestine I. Ohachosim, 2017. "Tax-budget Deficit Relationships: Fiscalists¡¯ Platform for Deficit Financing Policy," Business and Management Studies, Redfame publishing, vol. 3(3), pages 53-68, September.
    3. D.A. Kendrick & H.M. Amman, 2011. "A Taylor Rule for Fiscal Policy," Working Papers 11-17, Utrecht School of Economics.
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    More about this item

    Keywords

    deficit; tax rate; feedback rule; quadratic-linear problem;
    All these keywords.

    JEL classification:

    • E10 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - General
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • C54 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Quantitative Policy Modeling

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