Public Finance: An Introduction

Public Finance: An Introduction

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4. Types of Government Expenditures

– Purchase of goods and services

Beside financing daily operation, government purchase on good and service can also be used as a tool stimulate economy.

– Transfer of income/Transfer payment

It is a money transfer to individuals/families, as for welfare or social security benefits and not reckoned when calculating the national income since it is only transferred rather than paid for purchasing good or service.

– Interest payment

Interest payments resulted from government’s outstanding debt, including long-term bonds, long-term loans, and other debt instruments to domestic and foreign residents/agencies.

5. Type of Budget Document

– Unified Budget

It is a combination of on-budget and off-budget items. It depends on nation budget characteristic. In the United States, a unified budget is consolidation of federal government’s receipts and outlays from federal funds and the Social Security Trust Fund.

– Regulatory Budget

 Governments account for regulatory expenditures in a similar way to fiscal expenditures. Regulatory costs refer to the broad direct and indirect costs to regulation, including financial costs (taxes, fees), administrative costs (reporting requirements), substantive compliance costs (investment, training) and indirect costs (market structure, consumption patterns)

References:
Public Finance 8th Edition, by Harvey S. Rosen and Ted Gayer
A Primer on Regulatory Budget, OECD Journal on Budgeting Volume 2010/3, by Nick Malyshev.

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