Dates

July 8-10, 2009.

Overview
As the current global economic and financial crisis shows, government plays a major role in the economy.

In order to monitor the economy in an uncertain and rapidly changing world, to take the best decisions and to assess their impacts, Ministries of Finance need state-of-the-art modeling techniques.

This course will focus on the following three areas:

1. Impact of Economic Activity on Fiscal Position
1.1. Estimation of Potential Output Growth / Output Gap
1.2. Estimation of the Budget Elasticities
1.3. Estimation of the Cyclically-Adjusted Budget Balance
1.4. Calculation of the Safety Margin
1.5. Fiscal Stance over the Cycle (pro-cyclical / counter-cyclical behavior of
Fiscal policy)

2. Fiscal Sustainability
2.1. The Dynamics of the Debt and Primary Balance Ratios
2.2. “Close to Balance or in Surplus” (CBS) Rule
2.3. Sustainability Indicators (of how far fiscal policy departs from sustainability)
2.4. Targets of Fiscal Convergence (Medium-term fiscal sustainability model)
2.5. Sustainability of fiscal policy in connection with demographic projections (Synthetic indicators & Generational Accounting Model)

3. Evaluating Public Sector Projects
3.1. Evaluating a Single Project (Cost-Benefit Analyses)
3.2. Evaluating Mutually Exclusive Alternatives (Incremental Comparisons with B/C Ratios)
3.3. Criteria for Constrained Project Selection (Cost Effectiveness)

The course is fully practical.  Theoretical explanations are followed by individual hands-on exercises on the computer. Please bring your laptop.