Study of the Optimal budget Allocation and Pandemic Impact

Abstract

Within the scope of this research, using the quantitative data of 88 quarters of Mongolian budget income and expenditure for 2020-2021, the structural effect was divided into two parts: pre-pandemic and post-pandemic, which were shown in the budget income and expenditure portfolio using the Markovitch portfolio choice model. Optimum values are obtained through programming or optimization, and how much the optimal value deviates from the original value is analyzed by the one-sigma rule. According to the results of the survey, the pandemic had a 48 percent impact on budget expenditures and 32 percent on budget revenue. Therefore, to improve budget efficiency, budget spending should be implemented effectively. In particular, policymakers should pay attention to the gradual increase in investment in the health and education sectors.

JEL categories: C23, C50, E62, I25, I15

Keywords: budget revenue, budget expenditure, balanced budget balance, budget deficit, Markovitch model, quadratic programming

DOI: 10.7176/EJBM/16-8-02

Publication date: October 30th 2024