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Fiscal Solvency and Fiscal Forecasting in Europe

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  • Artis, Michael J
  • Marcellino, Massimiliano

Abstract

This paper analyses two features of concern to policy-makers in the countries of the prospective European Monetary Union: the solvency of their government’s finances; and the accuracy of fiscal forecasts. Extending the existing methodology of solvency tests, the paper finds that, with few exceptions, EU governments are insolvent, albeit debt/GDP ratios show signs of stabilizing. The accuracy of official short-term fiscal forecasts (those of the OECD) is analysed, using conventional techniques, and found to be reassuring.

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Bibliographic Info

Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 1836.

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Date of creation: Mar 1998
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Handle: RePEc:cpr:ceprdp:1836

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Keywords: Deficits; Fiscal Policy; Forecast Accuracy; Maasticht treaty; Solvency; stability and growth pact;

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