ABSTRACT
The concept of operational deficit is taken by many economists as the relevant concept of public deficit. It is argued in this paper that the concept is flawed and that its current methodology of estimation is inadequate. In 1990, for instance, the Government deducted an inflation of 1355% from the nominal deficit (PSBN), but only accounted an expense of 837% as monetary correction in the expenditure side, to arrive at an estimate of a 1,2% operational “surplus” over GDP. It is argued that such number is illusory and that a better alternative is rouse an ex-ante concept of deficit for policy decisions.
KEYWORDS:
Public spending; déficit