IDEAS home Printed from
   My bibliography  Save this paper

Effectiveness versus reliability of policy actions under government budget constraint: the case of France


  • Bianchi, Carlo
  • Brillet, Jean-Louis
  • Calzolari, Giorgio


The evaluation of policy actions by means of a large scale econometric model often begins with the analysis of multipliers. A large value of a multiplier, with the right sign, suggests that the policy instrument should be very effective in moving up or down the given target variable. However, government budget usually imposes some constraints on the policy action, so that the important criterion should not be the raw multiplier but a trade-off criterion which measures the effect of a variation of the Instrument associated with a given cost in terms of government deficit: in other words a trade-off criterion. The larger the trade-off criterion, the more effective is expected to be the policy action. Effectiveness cannot, however, be the only guideline for the decision maker. The trade-off criterion which is computed from the macroeconomic model is obviously affected by uncertainty to some extent; a criterion which appears to be strongly effective might at the same time be affected by a high degree of uncertainty as to recommend against its use.

Suggested Citation

  • Bianchi, Carlo & Brillet, Jean-Louis & Calzolari, Giorgio, 1985. "Effectiveness versus reliability of policy actions under government budget constraint: the case of France," MPRA Paper 29055, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:29055

    Download full text from publisher

    File URL:
    File Function: original version
    Download Restriction: no

    References listed on IDEAS

    1. Bianchi, Carlo & Calzolari, Giorgio & Corsi, Paolo, 1981. "Estimating asymptotic standard errors and inconsistencies of impact multipliers in nonlinear econometric models," Journal of Econometrics, Elsevier, vol. 16(3), pages 277-294, August.
    2. Bianchi, Carlo & Brillet, Jean-Louis & Calzolari, Giorgio, 1984. "Analyse et mesure de l'incertitude en prevision d'un modele econometrique. Application au modele mini-DMS
      [Analysis and measurement of forecast uncertainty in an econometric model. Application to m
      ," MPRA Paper 22565, University Library of Munich, Germany, revised 1984.
    3. Brundy, James M & Jorgenson, Dale W, 1971. "Efficient Estimation of Simultaneous Equations by Instrumental Variables," The Review of Economics and Statistics, MIT Press, vol. 53(3), pages 207-224, August.
    4. Amemiya, Takeshi, 1983. "Non-linear regression models," Handbook of Econometrics,in: Z. Griliches† & M. D. Intriligator (ed.), Handbook of Econometrics, edition 1, volume 1, chapter 6, pages 333-389 Elsevier.
    5. James M. Brundy & Dale W. Jorgenson, 1971. "Efficient estimation of simultaneous equations by instrumental variables," Working Papers in Applied Economic Theory 3, Federal Reserve Bank of San Francisco.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Bianchi, Carlo & Brillet, Jean-Louis & Calzolari, Giorgio, 1986. "Forecasts and constraints on policy actions: the reliability of alternative instruments," MPRA Paper 29119, University Library of Munich, Germany.

    More about this item


    Macroeconometric model; French economy; stochastic simulation; multipliers; trade-off criteria; budget constraint; asymptotic standard errors;

    JEL classification:

    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
    • C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection
    • C30 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - General


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:29055. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Joachim Winter). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.