Over budgeting has resulted into funds remaining unutilised and some planned projects not being carried out at all. Under budgeting has resulted into funds rapidly being exhausted - in some instances, within a few months into the financial year. But even more serious, over budgeting and under budgeting have provided departments with the opportunity for virement.
3  The model is documented in L. Christiano, R. Motto and M. Rostagno (2003), “The Great Depression and the FriedmanSchwartz Hypothesis,” Journal of Money, Credit and Banking 35(6), December. In a more recent paper, the authors use the model for a comparative estimation exercise, identifying structural shocks and monetary policy rules for the euro area and the US.