489 / 514
Kamelia Assenova
n
478
GDP
t
= d
0
+ d
1
PMS
t
+ d
2
PMS
t-1
+ ε,
(4)
where
GDP
t
- Gross domestic product for the current quarter
PMS
t
- public spending for maintenance by consolidated state budget for the current quarter
PMS
t -1
- public spending for maintenance by consolidated state budget for the previous period.
2.2 Model for public spending with European funds
The similar model was developed to test the impact of public expenditure paid by EU funds on the GDP. The study
was carried out for period 2008 – 2013, as well as it is tested the impact of public spending, financed with EF dur-
ing different quarters on annual GDP due to significant differences in
the using of EF during the years of period – from very small amounts in the first years to around full amount by
the EU budget for Bulgaria during last years of period ( see you the Graphs below – part 3).
EF
t - 1
- European funds paid for the previous quarter
GDP
t
= a
0
+ a
1
EF
t
+ a
2
EF
t-1
+ ε,
(1)
where
GDP
t
- Gross domestic product for the current quarter
GDP
year
= b
0
+ b
1
EF
t
+ ε
(2)
GDP
year
= b
0
+ b
2
EF
t-1
+ ε
(3)
GDP
year
= b
0
+ b
3
EF
t-2
+ ε
(4)
GDP
year
= b
0
+ b
4
EF
t-3
+ ε ,
(5)
where
GDP
t
- GDP for the current year
EF
t
- European funds paid for the current year in the fourth quarter
EF
t - 1
- European funds paid for the current year in the third quarter
EF
t - 2
- European funds paid for the current year for the second quarter
EF
t - 3
- European funds paid for the current year for the first quarter
The model tests the impact of public spending, financed with EF in previous periods, because EU programs have
character design and it means they have more long- than short-term effect on the level of GDP. Furthermore,
there is a time lag between the realization of public expenditure paid by EF and its impact on the aggregate supply.