The Effect of P Change in Opulation Age Structure on Government Budget Deficit

The aim of this thesis is to investigate the effect of changes in population age structure on the budget deficit and forecast its evolution using MIDAS method and time series data during the years 1367 until 1393.One of the criteria for assessing the economic strength of a country is to consider government revenues and expenditure and hence the budget balance. In this paper the effect of changing age structure on government budget deficits will be examined.
To this end a relationship for tax revenues and a relationship for government consumption expenditure is stipulated. For this purpose, we have estimated the corresponding function using the relevant data in the period the first quarter of 1367 to the fourth quarter of 1392. The results show that age structure of population have positive and significant effects on government consumption expenditure and tax revenues and thus budget deficit. Next, we forecasted the consumption expenditure and the government tax revenues for 1393. The budget deficit forecasted by the model is 130063.3 b.Rials for 1393 and compared to its real data which is 131016.1 b.Rials, indicate that the model forecast is satisfactory.