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Real-time data and fiscal policy analysis: a survey of the literature

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  • Cimadomo, Jacopo

Abstract

This paper surveys the empirical research on fiscal policy analysis based on real-time data. This literature can be broadly divided in three groups that focus on: (1) the statistical properties of revisions in fiscal data; (2) the political and institutional determinants of projection errors by governments and (3) the reaction of fiscal policies to the business cycle. It emerges that, first, fiscal data revisions are large and initial releases are biased estimates of final values. Second, the presence of strong fiscal rules and institutions leads to relatively more accurate releases of fiscal data and small deviations of fiscal outcomes from government plans. Third, the cyclical stance of fiscal policies is estimated to be more ‘counter-cyclical’ when real-time data are used instead of ex-post data. Finally, more work is needed for the development of real-time datasets for fiscal policy analysis. In particular, a comprehensive real-time dataset including fiscal variables for industrialized (and possibly developing) countries, published and maintained by central banks or other institutions, is still missing. JEL Classification: E62, H60, H68

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Bibliographic Info

Paper provided by European Central Bank in its series Working Paper Series with number 1408.

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Date of creation: Dec 2011
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Handle: RePEc:ecb:ecbwps:20111408

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Keywords: cyclical sensitivity; data revisions; Fiscal Policy; real-time data;

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Cited by:
  1. Corsetti, Giancarlo & Meier, André & Müller, Gernot, 2012. "What Determines Government Spending Multipliers?," CEPR Discussion Papers 9010, C.E.P.R. Discussion Papers.
  2. Douglas Sutherland & Peter Hoeller & Rossana Merola, 2012. "Fiscal Consolidation: Part 1. How Much is Needed and How to Reduce Debt to a Prudent Level?," OECD Economics Department Working Papers 932, OECD Publishing.
  3. Richard Jong-A-Pin & Jan-Egbert Sturm & Jakob de Haan, 2012. "Using Real-Time Data to Test for Political Budget Cycles," CESifo Working Paper Series 3939, CESifo Group Munich.
  4. Douglas Sutherland & Peter Hoeller & Rossana Merola & Volker Ziemann, 2012. "Debt and Macroeconomic Stability," OECD Economics Department Working Papers 1003, OECD Publishing.
  5. Georgia Kaplanoglou & Vassilis T. Rapanos, 2013. "Fiscal Deficits and the Role of Fiscal Governance: The case of Greece," Economic Analysis and Policy (EAP), Queensland University of Technology (QUT), School of Economics and Finance, vol. 43(1), pages 5-30, March.
  6. António Afonso & Rui Carvalho, 2014. "Revenue Forecast Errors in the European Union," Working Papers Department of Economics 2014/02, ISEG - School of Economics and Management, Department of Economics, University of Lisbon.
  7. Ansgar Belke, 2014. "Monetary Dialogue 2009-2014 – Looking Backward, Looking Forward," Ruhr Economic Papers 0477, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
  8. Ley, Eduardo & Misch, Florian, 2013. "Real-time macro monitoring and fiscal policy," Policy Research Working Paper Series 6303, The World Bank.
  9. Paloviita, Maritta, 2012. "Real time uncertainty in fiscal planning and debt accumulation in the euro area," Research Discussion Papers 35/2012, Bank of Finland.
  10. Paloviita, Maritta, 2012. "Fiscal planning and implementation: euro area analysis based on real time data," Research Discussion Papers 34/2012, Bank of Finland.

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