As budget expenditures by objects all differently effect on macroeconomic variables such as GDP, unemployment rate, and price, the fiscal policy target can be achieved with the same amount of money by organizing expenditure in different ways. Hence, FIPAM, a macro-econometric model being specialized on the fiscal sector, is established in this study to compare and analyze the economic effects on each budget expenditure by objects. Through the model, macro-economical trend of the each expenditure is traced and a ripple effect is also analyzed by capturing short term relations among economy variables used in the model.

According to this analysis, it is desirable to increase the capital expenditure if the government’s fiscal policy targets on raising GDP growth, increasing capital formation, and lowering unemployment rate. On the other hand, it is effective to increase the current expenditure, if the government aims at expanding private consumption, which is directly linked to public welfare. However, the government also needs to bear in mind that expanding private consumption could bring inflation.