trends and future of sustainable development - TransEco

In this paper are presented some fiscal policy simulation scenarios by using a financial programmingmodel (SAM-MEGA 1 ) for the Romanian economy (weakly structured). The purpose of the paper is, thus,twofold: (i) to estimate the dynamics of the GDP, employment and wages as a response to the fiscalpolicies changes, (ii) to investigate the impact on the budgetary revenues and expenditures by the directeffects of the fiscal policies and by the indirect effects of the economic growth changes.The next section presents the particular features of the model used for fiscal policy simulationanalysis, section 3 reports the results of the scenarios, and section 4 draws some conclusions.2. Some features of the model used for budgetary forecastsSAM-MEGA model forecasts the main indicators of the national accounts (the GDP components for thesupply and demand part) and a large set of indicators grouped on several blocks according to thestructure agreed by IMF for the financial programming: General Consolidated Budget, Balance ofPayments, Exchange rate, Labor cost, Monetary Indicators.As a general structure, the model resembles the IMF and World Bank integrated model but theforecasting equations and the blocks of indicators were conceived differently to meet the specificity ofthe Romanian statistics. A few original elements adopted within the model for the budgetary forecastingcan be mentioned: Forecasting and decomposition of the gross added value by the method of the factors revenue:employees’ remuneration (consisting of the net salaries in the national economy, the socialcontributions of both employers and employees, the income tax), the self-consumption andother non-salary income, the economic agents profits - the macroeconomic indicators of laborcost and salary remuneration are forecasted in Labor cost block; The model explicitly forecasts the revenues of the institutional sectors for the Romanianeconomy, a necessary approach for the correct forecasting of the consolidated budget revenuesthrough a direct relation with the national account indicators. On the other hand, this creates thepossibility of a more realistic evidence of the resources of the hidden economy growth, as well asthe quantification of the economic agents behavior; Introduction of the block of equations concerning the interdependence between theproduct/production taxes in the GDP structure and the direct and indirect taxes within thegeneral consolidated budget. Thus, a clear connection is established between the generalconsolidated budget block and the national accounts block; The capital account of the public sector is calculated in accordance with an own methodology byusing the statistical information available in the State Treasury Balance Sheet, Public DebtAccount respectively; The explicit calculation within the model of the current accounts and the capital accounts of theinstitutional sectors should be particularly emphasized. This extension provides additional andextremely useful information regarding the functional behavior of sectors as a reaction at the1The model was improved by the author within the POSDRU/89/1.5/S/62988-1.5 “Doctoral and post-doctoralprograms in order to support research”, Project "Scientific Economic research, support of welfare and humandevelopment in the European context".288