The misleading operating deficit methodology

Vol. 11 No. 3 (1991)

Jul-Sep / 1991
Published July 1, 1991
PDF-Portuguese (Português (Brasil))
PDF-Portuguese (Português (Brasil))

How to Cite

Zini Jr., Álvaro Antônio. 1991. “The Misleading Operating Deficit Methodology”. Brazilian Journal of Political Economy 11 (3):418-25. https://doi.org/10.1590/0101-31571991-0872.

The misleading operating deficit methodology

Álvaro Antônio Zini Jr.
Faculdade de Economia e Administração da Universidade de São Paulo – FEA-USP, São Paulo/SP, Brasil.
Brazilian Journal of Political Economy, Vol. 11 No. 3 (1991), Jul-Sep / 1991, Pages 418-425

Abstract

The concept of operational deficit is taken by many economists as the relevant
concept of public deficit. It is argued in this paper that the concept is flawed and that its
current method- ology of estimation is inadequate. In 1990, for instance, the Government
deducted an inflation of 1355% from the nominal deficit (PSBN), but only accounted an
expense of 837% as monetary correction in the expenditure side, to arrive at an estimate of
a 1,2% operational “surplus” over GDP. It is argued that such number is illusory and that a
better alternative is rouse an ex-ante concept of deficit for policy decisions.

JEL Classification: H62; H60.


Keywords: Public spending déficit