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Application of Markowitz Model to Mongolian Government Budget

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DOI: 10.4236/ib.2019.113004    133 Downloads   230 Views

ABSTRACT

We apply Markowitz portfolio theory to Mongolian economy in order to define optimal budget structure. We assume that the government revenue is a portfolio consisting of seven major taxes and non-tax revenues. We minimize the variance of the portfolio under fixed return of the government revenue. This optimization problem has been solved by the conditional gradient method on MATLAB. Computational results based on Mongolian economic data are provided.

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Ankhbayar, C. , Lkhagvajav, B. , Tungalag, N. and Enkhbat, R. (2019) Application of Markowitz Model to Mongolian Government Budget. iBusiness, 11, 42-50. doi: 10.4236/ib.2019.113004.

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