binuraranasingha / research-project Goto Github PK

Main objective

· Main Research questions

The main research question is how to come up with a solution to minimize the risk if the monetary financing & borrowing used to finance the government expenditure. Here we consider the budget deficit as a norm hence monetary financing & borrowing to finance the government expenditure.

· Individual research question

Individual research question is how to come up with the ideal monetary financing, taxation, foreign borrowing, and domestic borrowing proportions to finance government expenditure by minimizing the risk. 4 sources which are monetary financing, taxation, foreign borrowing, and domestic borroiwng divided among 4 members to find their optimum proportion.

· Individual Objectives,

Main individual objective is to predict monetary financing, tax, borrowing amounts for next 5 yars based on historical data. Few ML models are implemented for this purpose & the best model is selected.

Then the predicted amounts will be optimized using a simiulation (optimizating technique) in which macroeconomic constraints have been defined. Followings are the constraints. 1.Inflation rate sh ould be maintained at 5%, and 2. The debt GDP ratio should be less than it was in last year and ultimately be 60% or less. Implementation of the simulation is the integration process & it will be done as a team objective.

Relationship between budgetary sources & inflation need to be identified, hence a ML model needs to be implemented. That's also a team objective.

· Other necessary information

If the predicted moneytary financing, tax, or borrowing amount is greater than 150% of the previous year's amount of the respective source, then the expenditure amount needs to be adjusted accordingly. That's why the ML models are used to get amounts predicted for next 5 years.