Exploring the Dynamics and Modeling National Budget as a Supply Chain System: A Proposal for Reengineering the Budgeting Process and for Developing a Management Flight Simulator
Abstract
In the Science of Economics, there has been a debate about the optimal fiscal and budgetary policy that should be implemented by governments. On the one side, the advocates of the Keynesian Theory assert that in recession times governments should run budgets with deficits, in order to stimulate the economy, while the supporters of the Balanced Budget Theory, on the contrary, underscores the need to reduce and even eliminate the budget deficits. However, previous experience shows that both theories often failed to accomplish their goals, because they underestimated a very sensitive parameter: national budgets are not just an estimate of revenues and receipts or a simple statement. Rather, they are systems, the entities of which interact with each other and respond to any event affecting their state. Even further, a national budget can be considered as a special case of a supply chain system. Within this framework, the present thesis seeks to introduce a new aspect in budgeting. Specifically, the national budget is mapped as a supply chain and modeled as a system. Thereafter, the research focuses on and explores the budget?s dynamics, which are responsible for the failures experienced in the fiscal and budgetary policy and concludes with a proposal for reengineering the budgeting process, according to the postulates of the demand management process in a supply chain. Lastly, it underscores the need to develop a Management Flight Simulator, which will reveal the dynamics of national budgets, as the Beer Game does in the case of the supply chains, and that will act as a learning tool for anyone interested in budgeting, supply chains or/ and public economics.
Document Details
- Document Type
- Technical Report
- Publication Date
- Sep 01, 2012
- Accession Number
- ADA570473
Entities
People
- Christoforos Kalloniatis
Organizations
- Air Force Institute of Technology