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The IMF uses its well-known 'financial programming' model to derive monetary and fiscal programs to achieve the desired macroeconomic targets in countries undergoing crises or receiving debt relief. This paper considers under what conditions financial programming would work best, and then tests those conditions in the data. The key restrictions of financial programming are assumptions about exogeneity of some components of identities with respect to others, and the assumption of stable and 'reasonable' parameters for some very simple behavioral relationships. In at least the literal applications of the framework, financial programming does not do well in forecasting the target variables, even when some components of the identity are known with certainty Key words--developing countries, macroeconomic stabilization, international monetary fund, budget deficits, inflation

Economic growth in the European union remains slow, and budget deficits are increasing rapidly. Labor inflexibility is gaining more attention than the restrictive fiscal and monetary policies, which are the main causes for economic downturn. At this juncture it is imperative that the European Union abandon entirely the limits on budget deficits for their member nations. European Union should see to it that monetary policy does not dominate the overall economic policy.

In August 2009 the Congressional Budget Office (CBO) (2009) projected that the federal budget deficit would total $7.1 trillion over the 2010-2019 decade--under current law. That outcome would require the [...], In August 2009 the Congressional Budget Office warned that the budget was on an unsustainable path. Preventing federal debt from growing faster than the economy over the long-run requires large increases in revenues and/or decreases in spending. We explore, using the Urban-Brookings Tax Policy Center Model, whether incremental reforms of the current tax system could raise enough revenue to reduce the deficit to a sustainable level over the last five years of the current 10-year budget window. We conclude that feasible tax increases within the current tax structure cannot generate sufficient revenues to bring federal budget deficits under control. Keywords: Budget deficit, tax reform individual taxation JEL Codes: H20, H60

Ireland has successfully averted a major economic downturn by managing its budget deficit. The country's gross domestic product could have decreased by 14 percent over the recession's period. Austerity measures have included more than 174 billion pounds sterling in spending cuts.

An analysis of the major budget challenges in both the medium and long term planning for United States is presented. The deficits created as a result of the policies will raise the debt for the nation faster than its ability to pay. Methods of reducing the budget deficit as well not cutting down on investments in key areas such as health care costs and baby boom's retirement should not be overlooked.

We contribute to the debate on whether the U.S. large federal budget deficits are sustainable in the long run. We model the U.S. government deficit per capita as a threshold autoregressive process. We find evidence that the U.S. budget deficit is sustainable in the long run and that economic policy makers will only intervene to reduce per capita deficit when it reaches a certain threshold. (JEL C32, E62), I. INTRODUCTION There has been an ongoing debate on whether the U.S. fiscal policy is sustainable in the long run. In addressing this issue, a number of studies have examined [...]

Two decades ago Canada suffered a deep recession and teetered on the brink of a debt crisis caused by rising government spending. The Wall Street Journal said that growing debt [...]

Estonia has had a quick recovery from the recent recession and its economy is in better shape than before the crisis. It is now much leaner and significantly more capable [...]

A great number of European governments have decided on austerity policies to reduce their fiscal deficits and public debt. In order to evaluate such policies, it is necessary to analyze [...]

Austerity is a term used to describe debt-reduction policies, but it can mean radically different things. For some people, austerity means adopting a debt-reduction package dominated by tax increases. For [...]

The European sovereign debt crisis offers a cautionary tale for the United States. This is the case since all too sadly the U.S. public finances appear to be on the [...]

The basic idea behind Keynesian policy for achieving stable economic growth is straightforward, and superficially plausible. When the economy is in a downturn with underutilized resources, Keynesians believe the federal [...]

From the late 1980s on, many western governments 'discovered' that they will face a major fiscal crisis by the middle decades of this century. They have drawn this conclusion based [...]

As SPRINGTIME ROLLS into yet another hot summer here in the District of Columbia, the heat is also skyrocketing between a split Congress and the White House on a number [...]

The 'sub-prime' meltdown has accelerated critiques of the economic modelling that underpinned the activities of banking and allied industries. Coincidentally, there has been resurgence in interest in more socialised interpretations of economic life. In this article we seek to show how it may still be possible to marry formal economic modelling with these more socialised concerns. We argue that, at a time when many economists are anticipating slower growth rates in the future, such a possibility need not be disastrous. Indeed, it could result in genuine gains in terms of sustainability and a more just and stable society. Overall, then, we outline proposals for a different long-run economic trajectory and conclude with brief comments on the suggestion that Britain can validly overcome current deficits by copying the actions of the Liberal Government of Canada during the 1990s., In this article we critically examine the pursuit of economic growth as an end in itself: an endeavour that is so often front-page news. For example, in Britain, in June [...]

We can forecast this: forecasting will continue to be in the news. The U.S. government gives the current unemployment figures, and then we hear pundits and news sources predict what [...]

The incoming Labour Government of 1997 promised a new approach to the conduct of fiscal policy. Two lessons to be learnt from previous experience were: (I) adjust for the cycle [...]

The United Kingdom's economy will continue to struggle despite the end of the recession. The government is faced with the problem of how quickly economic policy could be reversed. The problem of the increased budget deficit also poses a problem for the government.

1. Introduction Contemporary economies, perhaps without exception, have been plagued with huge and escalating government budget deficits. These deficits are expected to have adverse economic consequences including high real interest [...]