IDEAS home Printed from https://ideas.repec.org/a/jof/jforec/v24y2005i5p311-324.html
   My bibliography  Save this article

Political manoeuvrings as sources of measurement errors in forecasts

Author

Listed:
  • Susanna-maria Paleologou

    (University of Ioannina, Greece)

Abstract

We test the extent to which political manoeuvrings can be the sources of measurement errors in forecasts. Our objective is to examine the forecast error based on a simple model in which we attempt to explain deviations between the March budget forecast and the November forecast, and deviations between the outcome and the March budget forecast in the UK. The analysis is based on forecasts made by the general government. We use the forecasts of the variables as alternatives to the outcomes. We also test for political spins in the GDP forecast updates and the GDP forecast errors. We find evidence of partisan and electoral effects in forecast updates and forecast errors. Copyright © 2005 John Wiley & Sons, Ltd.

Suggested Citation

  • Susanna-maria Paleologou, 2005. "Political manoeuvrings as sources of measurement errors in forecasts," Journal of Forecasting, John Wiley & Sons, Ltd., vol. 24(5), pages 311-324.
  • Handle: RePEc:jof:jforec:v:24:y:2005:i:5:p:311-324
    DOI: 10.1002/for.944
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1002/for.944
    File Function: Link to full text; subscription required
    Download Restriction: no

    File URL: https://libkey.io/10.1002/for.944?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Ohlsson, Henry & Vredin, Anders, 1996. " Political Cycles and Cyclical Policies," Scandinavian Journal of Economics, Wiley Blackwell, vol. 98(2), pages 203-218, June.
    2. Hibbs, Douglas A., 1977. "Political Parties and Macroeconomic Policy," American Political Science Review, Cambridge University Press, vol. 71(4), pages 1467-1487, December.
    3. Kenneth Rogoff & Anne Sibert, 1988. "Elections and Macroeconomic Policy Cycles," Review of Economic Studies, Oxford University Press, vol. 55(1), pages 1-16.
    4. Alberto Alesina, 1987. "Macroeconomic Policy in a Two-Party System as a Repeated Game," The Quarterly Journal of Economics, Oxford University Press, vol. 102(3), pages 651-678.
    5. G. Choate & Fred Thompson, 1988. "Budget makers as agents: A preliminar investigation of discretionary behavior under state-contingent rewards," Public Choice, Springer, vol. 58(1), pages 3-20, July.
    6. Hibbs, Douglas A, Jr, 1986. "Political Parties and Macroeconomic Policies and Outcomes in the United States," American Economic Review, American Economic Association, vol. 76(2), pages 66-70, May.
    7. William D. Nordhaus, 1975. "The Political Business Cycle," Review of Economic Studies, Oxford University Press, vol. 42(2), pages 169-190.
    8. Cukierman, Alex & Meltzer, Allan H, 1986. "A Positive Theory of Discretionary Policy, the Cost of Democratic Government and the Benefits of a Constitution," Economic Inquiry, Western Economic Association International, vol. 24(3), pages 367-388, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Stijn Goeminne & Benny Geys & Carine Smolders, 2008. "Political fragmentation and projected tax revenues: evidence from Flemish municipalities," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 15(3), pages 297-315, June.
    2. Björn Kauder & Niklas Potrafke & Christoph Schinke, 2017. "Manipulating Fiscal Forecasts: Evidence from the German States," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 73(2), pages 213-236, June.
    3. Chatagny, Florian, 2015. "Incentive effects of fiscal rules on the finance minister's behavior: Evidence from revenue projections in Swiss Cantons," European Journal of Political Economy, Elsevier, vol. 39(C), pages 184-200.
    4. Beate Jochimsen & Robert Lehmann, 2017. "On the political economy of national tax revenue forecasts: evidence from OECD countries," Public Choice, Springer, vol. 170(3), pages 211-230, March.
    5. Arai, Natsuki & Iizuka, Nobuo & Yamamoto, Yohei, 2022. "The Efficiency of the Government’s Revenue Projections," Discussion paper series HIAS-E-122, Hitotsubashi Institute for Advanced Study, Hitotsubashi University.
    6. Boukari, Mamadou & Veiga, Francisco José, 2018. "Disentangling political and institutional determinants of budget forecast errors: A comparative approach," Journal of Comparative Economics, Elsevier, vol. 46(4), pages 1030-1045.
    7. Zhiyong An & Yilin Hou, 2020. "Debt authority and intentional overstatement of budgetary deficit: evidence from Chinese Provinces," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 27(2), pages 461-477, April.
    8. Cepparulo, Alessandra & Gastaldi, Francesca & Giuriato, Luisa & Sacchi, Agnese, 2011. "Budgeting versus implementing fiscal policy:the Italian case," MPRA Paper 32474, University Library of Munich, Germany.
    9. Frank Bohn, 2019. "Political budget cycles, incumbency advantage, and propaganda," Economics and Politics, Wiley Blackwell, vol. 31(1), pages 43-70, March.
    10. Beate Jochimsen & Robert Lehmann, 2017. "On the political economy of national tax revenue forecasts: evidence from OECD countries," Public Choice, Springer, vol. 170(3), pages 211-230, March.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Laopodis, Nikiforos T. & Merika, Anna A. & Triantafillou, Annie, 2016. "Unraveling the political budget cycle nexus in Greece," Research in International Business and Finance, Elsevier, vol. 36(C), pages 13-27.
    2. Price, Simon, 1997. "Political Business Cycles and Macroeconomic Credibility: A Survey," Public Choice, Springer, vol. 92(3-4), pages 407-427, September.
    3. Ozkan, F Gulcin, 1998. "Partisan Business and Budget Cycles with Separate Fiscal and Monetary Authorities," The Manchester School of Economic & Social Studies, University of Manchester, vol. 66(2), pages 178-195, March.
    4. Juan Carlos Berganza, 1998. "Relationships Between Politicians and Voters Through Elections: A Review Essay," Working Papers wp1998_9809, CEMFI.
    5. Efthyvoulou, Georgios, 2011. "Political cycles under external economic constraints: Evidence from Cyprus," Journal of Economics and Business, Elsevier, vol. 63(6), pages 638-662.
    6. Aleksandra Praščević, 2017. "Political Economy Of Misusing Income Distribution In The Electoral Process – Biased Pluralism Approach," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 62(214), pages 7-44, June - Se.
    7. Marco Bonomo & Cristina Terra, 2005. "Elections And Exchange Rate Policy Cycles," Economics and Politics, Wiley Blackwell, vol. 17(2), pages 151-176, July.
    8. Ganesh Manjhi & Meeta Keswani Mehra, 2019. "Dynamics of Political Budget Cycle," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 5(1), pages 135-158, March.
    9. Brian Snowdon & Howard R. Vane, 1999. "The New Political Macroeconomics: An Interview with Alberto Alesina," The American Economist, Sage Publications, vol. 43(1), pages 19-34, March.
    10. Bülent Köksal & Ahmet Çalışkan, 2012. "Political Business Cycles and Partisan Politics: Evidence from a Developing Economy," Economics and Politics, Wiley Blackwell, vol. 24(2), pages 182-199, July.
    11. Marco Bonomo & Cristina Terra, 2010. "Electoral Cycles Through Lobbying," Economics and Politics, Wiley Blackwell, vol. 22(3), pages 446-470, November.
    12. Block, Steven A., 2002. "Political business cycles, democratization, and economic reform: the case of Africa," Journal of Development Economics, Elsevier, vol. 67(1), pages 205-228, February.
    13. Isadora Sánchez-Torné & Macarena Pérez-Suárez & Juan Carlos Morán-Álvarez, 2020. "Una comparativa de la innovación de Espana y Rusia: ¿políticas bilaterales para la innovación?," Revista Finanzas y Politica Economica, Universidad Católica de Colombia, vol. 12(1), pages 201-233, June.
    14. Sergey Sinelnikov & Pavel Kadochnikov & Ilya Trunin, 2008. "From Elections to Appointments of the Regional Governors: Major Challenges and Outcomes," Published Papers 2, Gaidar Institute for Economic Policy, revised 2008.
    15. Georgios Efthyvoulou, 2012. "Political budget cycles in the European Union and the impact of political pressures," Public Choice, Springer, vol. 153(3), pages 295-327, December.
    16. Maria Manuel Pinho, 2008. "The political economy of public spending composition: evidence from a panel of OECD countries," FEP Working Papers 295, Universidade do Porto, Faculdade de Economia do Porto.
    17. Block, Steven A. & Vaaler, Paul M., 2004. "The price of democracy: sovereign risk ratings, bond spreads and political business cycles in developing countries," Journal of International Money and Finance, Elsevier, vol. 23(6), pages 917-946, October.
    18. Rabia Nazir & Muhammad Nasir & Idrees Khawaja, 2022. "Political Budget Cycle: A Sub-National Evidence from Pakistan," Journal of Business Cycle Research, Springer;Centre for International Research on Economic Tendency Surveys (CIRET), vol. 18(3), pages 343-367, November.
    19. Endrit Lami & Drini Imami, 2013. "Searching for Political Fiscal Cycles in Hungary," Contemporary Economics, University of Economics and Human Sciences in Warsaw., vol. 7(4), December.
    20. Rodrigo M. S. Moita & Claudio Paiva, 2013. "Political Price Cycles in Regulated Industries: Theory and Evidence," American Economic Journal: Economic Policy, American Economic Association, vol. 5(1), pages 94-121, February.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:jof:jforec:v:24:y:2005:i:5:p:311-324. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley-Blackwell Digital Licensing or Christopher F. Baum (email available below). General contact details of provider: http://www3.interscience.wiley.com/cgi-bin/jhome/2966 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.