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How Do Canadian Budget Forecasts Compare with Those of Other Industrial Countries?

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Author Info

  • Martin Mühleisen
  • Kornélia Krajnyák
  • Stephan Danninger
  • David Hauner
  • Bennett Sutton

Abstract

This paper compares Canadian central government budget forecasting with forecasting by other industrial countries. While fiscal forecasting in Canada is governed by one of the strongest institutional frameworks, quantitative analysis suggests that budget projections of macroeconomic and fiscal aggregates have been more cautious than in other countries since the mid-1990s. The relatively volatile macroeconomic environment as well as institutional factors, such as Canada''s asymmetric deficit target, have likely contributed to this outcome.

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Bibliographic Info

Paper provided by International Monetary Fund in its series IMF Working Papers with number 05/66.

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Length: 49
Date of creation: 01 Mar 2005
Date of revision:
Handle: RePEc:imf:imfwpa:05/66

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Keywords: Budgets; Economic forecasting; Forecasting models; tax revenue; government expenditure; fiscal forecasts; fiscal forecasting; budget process; fiscal balance; fiscal policy; budget projections; government revenue; department of finance; fiscal performance; fiscal variables; fiscal projections; central government budget; budget year; fiscal aggregates; tax revenues; annual budget; revenue forecast; budget forecasting; fiscal rule; public debt; fiscal transparency; central government expenditure; fiscal policy rules; budget targets; fiscal rules; government budget; public finances; budget reporting; budget planning; fiscal authority; fiscal plans; interest expenditure; budget law; budget documents; national accounts; government spending; fiscal target; budget balance; budget office; budget preparation; fiscal years; budget report; budget policy; accountability framework; tax base; fiscal targets; treasury board secretariat; budget proposal; treasury board; annual budgets; budgetary framework; budget authority; budget plan; fiscal discipline; budget management; central government spending; government finances; fiscal planning; budget requests; public expenditure; budgetary funds; fiscal outcomes; budget preparation process; fiscal budget; debt service; fiscal policies; budget plans; fiscal relations; fiscal measures; fiscal framework; government budgets; taxation; government accounts; accrual accounting; aggregate fiscal; intergovernmental transfers; capital expenditures; budget policy statement; budget deficit; government expenditure shares; fiscal federalism; government expenditures; budget practices; revenue forecasting; fiscal responsibility act; fiscal information; fiscal arrangements; fiscal strategy report; expenditure ratio; long-term fiscal sustainability; fiscal policy objectives; expenditure programs; expenditure cuts; fiscal revenues; budget bill; budget directorate; internal audit; budget transactions; tax bases; government finance statistics; tax cuts; fiscal outlook; contingent liabilities; spending control; financial accounting; budgetary information; tax rates; budget outlook; fiscal outturns; fiscal implications; fiscal responsibility; fiscal situation; budget formulation; budget update; budget formulation process; budget resolution; debt burden; fiscal surplus; budget rules; budgetary expenditure; government finance; fiscal results; budget proposals; budget submission; fiscal model; budget institutions; budget policies; annual budget process; current expenditure; fiscal objectives; central budget; fiscal record; fiscal policy division; tax returns; budget legislation; government guarantees; revenue projections; tax policy; budget surpluses; fiscal developments; general budget; capital budget; budget formats; fiscal policy targets; fiscal spending; fiscal strategy; open budget preparation; budget outcomes; budget expenditure; fiscal variable; national budget;

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  1. Fair, Ray C & Shiller, Robert J, 1990. "Comparing Information in Forecasts from Econometric Models," American Economic Review, American Economic Association, vol. 80(3), pages 375-89, June.
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  4. Roy Batchelor, 2001. "How useful are the forecasts of intergovernmental agencies? The IMF and OECD versus the consensus," Applied Economics, Taylor & Francis Journals, vol. 33(2), pages 225-235.
  5. Ash, J. C. K. & Smyth, D. J. & Heravi, S. M., 1998. "Are OECD forecasts rational and useful?: a directional analysis," International Journal of Forecasting, Elsevier, vol. 14(3), pages 381-391, September.
  6. Zellner, Arnold, 1986. "Biased predictors, rationality and the evaluation of forecasts," Economics Letters, Elsevier, vol. 21(1), pages 45-48.
  7. Lars Jonung & Martin Larch, 2006. "Improving fiscal policy in the EU: the case for independent forecasts," Economic Policy, CEPR & CES & MSH, vol. 21(47), pages 491-534, 07.
  8. Michael J. Artis, 1996. "How Accurate Are the Imf's Short-Term Forecasts? Another Examination of the World Economic Outlook," IMF Working Papers 96/89, International Monetary Fund.
  9. Prakash Loungani, 2000. "How Accurate Are Private Sector Forecasts," IMF Working Papers 00/77, International Monetary Fund.
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Citations

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Cited by:
  1. Frankel, Jeffrey A., 2011. "A Solution to Overoptimistic Forecasts and Fiscal Procyclicality: The Structural Budget Institutions Pioneered by Chile," Scholarly Articles 4723209, Harvard Kennedy School of Government.
  2. Robert P. Hagemann, 2010. "Improving Fiscal Performance Through Fiscal Councils," OECD Economics Department Working Papers 829, OECD Publishing.
  3. Teresa Leal & Javier J. Pérez & Mika Tujula & Jean-Pierre Vidal, 2008. "Fiscal Forecasting: Lessons from the Literature and Challenges," Fiscal Studies, Institute for Fiscal Studies, vol. 29(3), pages 347-386, 09.
  4. Peter Heller & David Hauner, 2006. "Fiscal policy in the face of long-term expenditure uncertainties," International Tax and Public Finance, Springer, vol. 13(4), pages 325-350, August.
  5. Jeffrey Frankel & Jesse Schreger, 2013. "Over-optimistic official forecasts and fiscal rules in the eurozone," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 149(2), pages 247-272, June.
  6. Martin Keene & Peter Thomson, 2007. "An Analysis of Tax Revenue Forecast Errors," Treasury Working Paper Series 07/02, New Zealand Treasury.
  7. Gerardo Uña, 2005. "El Congreso y el Presupuesto Nacional : Desempeño y Condicionantes de su rol en el Proceso Presupuestario," Public Economics 0508013, EconWPA.
  8. David Hauner, 2007. "Aging: Some Pleasant Fiscal Arithmetic," International Advances in Economic Research, Springer, vol. 13(3), pages 347-364, August.
  9. Jeffrey Frankel, 2011. "A Solution to Fiscal Procyclicality: the Structural Budget Institutions Pioneered by Chile," Journal Economía Chilena (The Chilean Economy), Central Bank of Chile, vol. 14(2), pages 39-78, August.
  10. 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.
  11. Anthony Annett, 2006. "Enforcement and the Stability and Growth Pact," IMF Working Papers 06/116, International Monetary Fund.
  12. Jeffrey A. Frankel, 2011. "Over-optimism in Forecasts by Official Budget Agencies and Its Implications," NBER Working Papers 17239, National Bureau of Economic Research, Inc.
  13. Robert Hagemann, 2011. "How Can Fiscal Councils Strengthen Fiscal Performance?," OECD Journal: Economic Studies, OECD Publishing, vol. 2011(1), pages 1-24.
  14. Jeffrey A. Frankel & Jesse Schreger, 2012. "Over-optimistic Official Forecasts in the Eurozone and Fiscal Rules," NBER Working Papers 18283, National Bureau of Economic Research, Inc.
  15. Peter S. Heller & David Hauner, 2005. "Characterizing the Expenditure Uncertainties of Industrial Countries in the 21st Century," IMF Working Papers 05/91, International Monetary Fund.
  16. Thiess Büttner & Björn Kauder, 2008. "Methoden der Steuerschätzung im internationalen Vergleich," ifo Forschungsberichte, Ifo Institute for Economic Research at the University of Munich, number 44, June.

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