Heterogeneous effects of fiscal rules under the maastricht fiscal criterion: budget fiscal deficit and debt sustainability analysis

Abstract

We contend that ambivalence or uncertainty regarding the error terms may be the root cause of many methodological misunderstandings in timeseries econometrics. Macroeconomic time series have imprecise relationships, and early econometricians invariably discovered that any estimated relationship would only fit with errors. Second part is designed to quarterly estimated structural macro econometric model for the Republic of Moldova, denoted A Classical Macroeconometric Data Model for the Republic of Moldova (MDM) in context of Neo-Classical Approach of the Economy. We have interpreted the term error from the perspective of 7 macroeconomic indicators, namely Gross Domestic Product (error, pension), Inflation Rate (error, wage and salary,) Interest Rate (error, unemployment) Unemployment Rate (error inflation rate), Budget Fiscal Deficit (error, ra-gap vat gap estimation), Public Debt (ra-gap vat gap estimation) and Exchange Rate (error, gross domestic product). As research methods, we examines the interpretation of equation errors in time series econometrics. We contrast the view of errors as what is omitted from the statistical model with the view that the errors represent the shocks that are the important driving forces of model dynamics. The history of econometrics may be seen as oscillating between these interpretations of errors, with some econometricians attempting to maintain both simultaneously. As results, in 2020 due to COVID-19 we decomposes the dynamics of the modeled variable into three parts: short-run shocks, disequilibrium shocks, and innovative residuals, with only the first two of these sustaining an economic interpretation.