2.1.2 Relevant variables to be considered in the short term

To achieve short-term objectives, a programming model of the current sphere has to be chosen, to which a programming financial model should be added, both joined by the bridge or process of saving and investment.

If any programming model of national accounts is taken, with “n” equations and “n” unknown quantities, and another model is added with “m” equations and “m” unknown quantities, there will be a final model of “m + n” equations with “m + n” unknown quantities, as long as the latter model has behavior relations cross-linked and interdependent with the former.

The chosen model must have “n” unknown quantities and “n” equations, and its variables must be measured at nominal and constant prices of a given base year.

By short term, it is understood to be a period in which there is no substantial modification of the productive capacity.

Both the behavior relations and their parameters are variables in time. Therefore, they include changes in the economic policy (for instance, changes in taxes, etc.) and institutional changes (creation, growth or decrease of the functions of certain financial intermediaries).

From all that has been said, it can be concluded that there will be two kinds of parameters:

1) The ones deducted from historical figures and that can be used for the prognosis of the short-term financial program.

2) And the short term programming ones, which imply changes and directions of the economic and institutional policies.

a. Real or physical variables

- Product

- Income

- Consumption

- Transfer

- Interest

- Others

- Gross geographical saving

- Net geographical saving

- Allocations for the consumption of fixed capital

- Gross geographical investment

- Gross geographical investment in fixed capital

- Changes in stock

b. Financial variables

- External loans

- Internal loans

- External credits write-offs

- Internal credits write-offs

- Capital contribution

- Bond issue

- Bond issue redemption

- Share issue

- Sale-purchase of land

- Changes in gold holdings and foreign exchange reserves

- Changes of the amounts of money

- Changes of other assets and liabilities

Financial variables to be considered in the short term should be referred to the period flows (or the new ones) that finance capital expenditure in the program of each of the economic agents.

Real financial variables should be expressed in both national and foreign currency (the latter is expressed in dollars and converted to national currency by the type of exchange rate programmed in the short term).

The purpose of setting forth a global real-financial model is to place on record the role of the economic agent General government and its interdependency policies with the other economic agents of the country, especially with the financial system and the rest of the world.

This time the purpose is to classify fiscal policy within the economic policy of a country and frame structural balance as an instrument of the financial-fiscal balances.