How can the preferences of policy makers be operationalised in optimum control problems with macroeconometric models? : a case study for Slovenian fiscal policies

Blueschke, Dmitri (author), Weyerstrass, Klaus (author), Neck, Reinhard (author), Verbič, Miroslav (author)

In this paper, we use the results of a survey among Slovenian politicians in order to design an objective function for an optimal control problem with a macroeconometric model for fiscal policy in Slovenia that takes account of policy makers’ preferences. The paper discusses three different scenarios in which the policy preferences revealed in interviews can be included in the objective functions of the control problems. These objective functions are then used to calculate optimal fiscal policies for the Slovenian economy until 2030. For this purpose, we utilise the macroeconometric model SLOPOL10 and the OPTCON2 algorithm. The results indicate qualitatively similar behaviour of the optimised dynamic system and a better performance (lower values of the loss due to deviation from “ideal” paths) from a ranking-based approach than from an ad-hoc assumption of policy makers’ preferences. We sketch how to integrate the approach in a decision-support system for macroeconomic policy design.

• Language: English
• Keywords: fiscal policy, econometrics, models, Slovenia, policy preferences, macroeconomics, optimum control
• Work type: Article
• Typology: 1.01 - Original Scientific Article
• Organization: EF - School of Economics and Business
• Publication status: Published
• Publication version: Version of Record
• Year: 2024
• Number of pages: Str. 151-169
• Numbering: Vol. 48, no. 2
• PID: 20.500.12556/RUL-169961
• UDC: 330.4:336
• ISSN on article: 2459-8860
• DOI: 10.3326/pse.48.2.2
• COBISS.SI-ID: 198699779
• Publication date in RUL: 27.02.2026

Record is a part of a journal

• Title: Public sector economics
• Shortened title: Public sect. econ.
• Publisher: Institute of Public Finance
• ISSN: 2459-8860
• COBISS.SI-ID: 1847182

Licences

• License: CC BY-NC 4.0, Creative Commons Attribution-NonCommercial 4.0 International
• Link: http://creativecommons.org/licenses/by-nc/4.0/
• Description: A creative commons license that bans commercial use, but the users don’t have to license their derivative works on the same terms.

Secondary language

• Language: Slovenian
• Keywords: fiskalna politika, ekonometrija, modeli, Slovenija

Projects

• Funder: FWF - Austrian Science Fund
• Funding programme: Internationale Projekte
• Project number: I 2764
• Name: Public spending and fiscal multipliers under various policy mixes

• Funder: ARIS - Slovenian Research and Innovation Agency
• Project number: 630-31/2016-1
• Name: Public Spending and Fiscal Multipliers under Various Economic Policy Mixes: A Quarterly Macroeconometric Approach