Economie et statistiques N° 63/2013 Modeling of public expenditure: description of variables and econometric estimation

This work proposes a very detailed modeling of Luxembourg’s public expenditure, in the context of STATEC’s macro-econometric model, called Modux. It distinguishes 12 spending functions and may hence improve the forecast of the overall balance of public finance in the framework of the establishment of the Stability and convergence programs, a process to which STATEC is closely associated as a member of the Forecasting Committee. We use an a-theoretical modeling approach based on annual data starting either in 1990 or 2000.