Rational expectations theory and macro budgetary decision-making
Comparative analysis of Canada, UK, and USA
Bibliographic Data
| ID | 20201249 |
|---|---|
| Authors | Christopher G Reddick (0000-0002-3882-5302, The University of Texas at San Antonio, corresponding author) |
| Year | 2004 |
| Volume | 16 |
| Issue | 3 |
| Pages | 316-356 |
| Publication date | 2004-03-01 |
| Peer Reviewed | Yes |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | Journal of Public Budgeting Accounting & Financial Management (JOURNAL) |
| Journal identifiers | ISSN: 1096-3367 • E-ISSN: 1945-1814 |
| Publisher | Emerald (PUBLISHER) |
| DOI | 10.1108/jpbafm-16-03-2004-b001 |
| OpenAlex | W2773754738 |
| Language | EN |
| References cited | 35 |
An exciting opportunity that many advanced industrial democracies faced in the late 1990s was the movement from budgetary deficit to surplus. This came after years of persistent deficits. Traditional decisionmaking theories such as budgetary incrementalism failed to explain this longrun relationship, since it has been inherently a short-run theory. This paper uses rational expectations theory to demonstrate its relationship to budgetary decision-making reforms and the deficit (surplus) for Canada, the UK and the United States. The results demonstrated that there was an intertemporal budget constraint in operation in the three countries, and decision-makers at the macro level used rational expectations in the formulation of their annual budget. In the theory, budget actors strived to balance their budget, but did so over the longrun as opposed to the short-run incrementalist interpretation
Budget constraint · Deficit spending · Economics · Incrementalism · Macro · Macroeconomics · Management · Microeconomics · Political science · Public economics · Rational expectations · Rational planning model · Fiscal Policies and Political Economy · Law · Psychology
Applied time series analysis for the social sciences
The Political Economy of Public Administration
Inside Bureaucracy
Political Cycles and the Macroeconomy
Rational Expectations and the Theory of Price Movements
Agendas, alternatives, and public policies
Democracy, Bureaucracy and Public Choice
On the Principles of Political Economy, and Taxation
Congress and Money
Testing The Limits of Incrementalism
Is there a key to the normative budgeting lock
Stochastic Implications of the Life Cycle-Permanent Income Hypothesis
Are Government Bonds Net Wealth
The Treasury and Whitehall
Public Principles of Public Debt
Budget Reform in St. Louis
Explaining the Variable Utility of Disjointed Incrementalism
Peasants or Bankers? The American Electorate and the U.S. Economy
The Confusing Case of Budgetary Incrementalism
The State of the States
Political Implications of Budget Reform
Attention, Inertia, and Equity in the Social Security Program
Does Incrementalism Stem from Political Consensus or from Institutional Gridlock
Explaining Presidential Priorities
| Citation velocity | historical |
|---|---|
| Highly cited | No |