Stuart Baumann. 2019. Putting it off for later - Procrastination and end of fiscal year spending spikes. The Scandinavian Journal of Economics, 121 (2), pages 706-735.
Many governments around the world exhibit heightened end of the fiscal year spending. These end of fiscal year spending spikes often concern policy makers due to their tendency to result in lower quality spending. This paper uses UK data to offer evidence against the precautionary savings explanation for spending spikes. An alternate explanation is offered with procrastination driving heightened end of fiscal year spending. A new technique of time variant budgetary taxes is calibrated to the model and shown to be effective for smoothing spending and improving spending efficiency throughout the fiscal year.
JEL Codes: H11, H50, H61
Keywords: Government spending, fiscal year distortions
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A fixed point problem is one where we seek a vector X for a function f(x) such that f ( X ) = X . The solution of many such problems can be accelerated by using a fixed point acceleration algorithm. With the release of the FixedPoint package there is now a number of algorithms available in R that can be used for accelerating the finding of a fixed point of a function. These algorithms include Newton acceleration, Aitken acceleration and Anderson acceleration as well as epsilon extrapolation methods and minimal polynomial methods. This paper demonstrates the use of fixed point accelerators in solving numerical mathematics problems using the algorithms of the FixedPoint package as well as the squarem method of the SQUAREM package.