The article tested a modification of the G. Markowitz’s model for the task of managing the federal budget deficit in the formation of the federal law about the federal budget for the next fiscal year and for the planning period. The logical-mathematical method of empirical research was used in modeling with the use of theoretical conclusions in the sphere of public finance. The possibility of practical use of such a model is justified by the given assessment of the model parameters based on actual data for 2010-2017. Based on historical data, restrictions on the marginal volume of revenue planning from deficit financing sources are assumed. Because of macroeconomic uncertainty potential revenues are projected using interval coefficients. The effectiveness of the federal budget deficit management portfolio constructed according to the model is proposed to be compared with the deficit management parameters laid down in the federal budget in 2018. In addition, based on the assessment of the impact of diversification and expectations of economic agents (in the model presented as "transaction costs") the article discussed the feasibility of using the model in planning the management of the federal budget deficit. Taking into account the empirical results it is concluded that ignoring the expectations of the planning period in the formation of the federal budget deficit management strategy can lead to significant losses in revenues.
The Geography of Incentives to Run a Federal Budget Deficit in Belgium
