Revenue Forecasting Practices: Differences across Countries and Consequences for Forecasting Performance
AbstractThis paper reviews the practice and performance of revenue forecasting in selected OECD countries. While the mean forecast errors are small in most countries, the precision of the forecasts measured by the standard deviation of the forecast error differs substantially across countries. Based on a comparison of forecasting practices we show that these differences can be attributed to a large part to differences in the timing of the forecasts and in the tax structure. In addition, we find some evidence that differences in methods and institutions also matter for the forecasting precision. In particular, we find that the use of macroeconomic models as well as the independence of revenue forecasting are associated with a lower standard deviation of the forecast error.
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Bibliographic InfoArticle provided by Institute for Fiscal Studies in its journal Fiscal Studies.
Volume (Year): 31 (2010)
Issue (Month): 3 (09)
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Other versions of this item:
- Thiess Buettner & Björn Kauder, 2009. "Revenue Forecasting Practices: Differences across Countries and Consequences for Forecasting Performance," CESifo Working Paper Series 2628, CESifo Group Munich.
- H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
- H68 - Public Economics - - National Budget, Deficit, and Debt - - - Forecasts of Budgets, Deficits, and Debt
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