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Fiscal forecasting: lessons from the literature and challenges

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  • Leal, Teresa
  • Pérez, Javier J.
  • Tujula, Mika
  • Vidal, Jean-Pierre

Abstract

While fiscal forecasting and monitoring has its roots in the accountability of governments for the use of public funds in democracies, the Stability and Growth Pact has significantly increased interest in budgetary forecasts in Europe, where they play a key role in the EU multilateral budgetary surveillance. In view of the increased prominence and sensitivity of budgetary forecasts, which may lead to them being influenced by strategic and political factors, this paper discusses the main issues and challenges in the field of fiscal forecasting from a practitioner’s perspective and places them in the context of the related literature. JEL Classification: H6, E62, C53

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Paper provided by European Central Bank in its series Working Paper Series with number 0843.

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Date of creation: Dec 2007
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Handle: RePEc:ecb:ecbwps:20070843

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Keywords: Fiscal policies; forecasting; government budget; monitoring;

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Cited by:
  1. Victor Duarte Lledo & Marcos Poplawski-Ribeiro, 2011. "Fiscal Policy Implementation in Sub-Saharan Africa," IMF Working Papers 11/172, International Monetary Fund.
  2. Ley, Eduardo & Misch, Florian, 2013. "Real-time macro monitoring and fiscal policy," Policy Research Working Paper Series 6303, The World Bank.
  3. Merola, Rossana & Pérez, Javier J., 2013. "Fiscal forecast errors: Governments versus independent agencies?," European Journal of Political Economy, Elsevier, vol. 32(C), pages 285-299.
  4. Laura Carabotta, 2014. "Which Agency and Which Period is The Best? Analyzing National and International Fiscal Forecasts in Italy," International Journal of Economic Sciences, University of Economics, Prague, University of Economics, Prague, vol. 2014(1), pages 27-46.
  5. 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.
  6. Jacopo Cimadomo, 2011. "Real-Time Data and Fiscal Policy Analysis: a Survey of the Literature," Working Papers 2011-20, CEPII research center.
  7. Pina, Álvaro M. & Venes, Nuno M., 2011. "The political economy of EDP fiscal forecasts: An empirical assessment," European Journal of Political Economy, Elsevier, vol. 27(3), pages 534-546, September.
  8. Onorante, Luca & Pedregal, Diego J. & Pérez, Javier J. & Signorini, Sara, 2010. "The usefulness of infra-annual government cash budgetary data for fiscal forecasting in the euro area," Journal of Policy Modeling, Elsevier, Elsevier, vol. 32(1), pages 98-119, January.
  9. Thiess Buettner & Björn Kauder, 2009. "Revenue Forecasting Practices: Differences across Countries and Consequences for Forecasting Performance," CESifo Working Paper Series 2628, CESifo Group Munich.
  10. Javier J. Perez & Rossana Merola, 2012. "Fiscal forecast errors: governments vs independent agencies?," EcoMod2012 4694, EcoMod.
  11. Teresa Leal & Diego Pedregal & Javier Pérez, 2011. "Short-term monitoring of the Spanish government balance," SERIEs, Spanish Economic Association, vol. 2(1), pages 97-119, March.
  12. António Afonso & Rui Carvalho, 2014. "Revenue Forecast Errors in the European Union," Working Papers Department of Economics, ISEG - School of Economics and Management, Department of Economics, University of Lisbon 2014/02, ISEG - School of Economics and Management, Department of Economics, University of Lisbon.
  13. Kempkes, Gerhard, 2012. "Cyclical adjustment in fiscal rules: Some evidence on real-time bias for EU-15 countries," Discussion Papers 15/2012, Deutsche Bundesbank, Research Centre.
  14. Leal Linares, Teresa & Pérez García, Javier J., 2011. "Análisis de las desviaciones presupuestarias aplicado al caso del presupuesto del Estado/The Performance of the Budgetary Target of the Central Government in Spain," Estudios de Economía Aplicada, Estudios de Economía Aplicada, vol. 29, pages 909 (14 pág, Diciembre.

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