The Fiscal Forecasting Track Record of the European Commission and Portugal
AbstractThis study aims at explaining the deviation between the budget balance ratio forecasts and the outcomes in the Portuguese official forecasts and in the European Commission (EC) vintage forecasts. Therefore, we used data from the EC for the period 1969-2011 and also the Portuguese official forecasts for 1977-2011. We explain the deviation of the budget balanceto- GDP through econometric estimations and present statistical decomposition about budget balance, revenue and spending-to-GDP deviations. The statistical significance of real GDP and inflation deviations reveals the effect of automatic stabilizers and the imperfect tax indexation system. The European panel reveals statistical significance (no significance) of investment (unemployment) deviations in the budget-to-GDP ratio. Countries with better fiscal rules seem to present favourable deviations (in the absence of fixed effects). In Portugal, there is evidence of unfavourable errors about the budget balance in nominal currency in most years, which has been offset (totally or partially) by a favourable nominal GDP effect deviation. JEL Classification: C23, E44, H68.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Department of Economics at the School of Economics and Management (ISEG), Technical University of Lisbon. in its series Working Papers with number 2012/37.
Date of creation: Oct 2012
Date of revision:
Contact details of provider:
Postal: Department of Economics, School of Economics and Management (ISEG), Technical University of Lisbon, Rua do Quelhas 6, 1200-781 LISBON, PORTUGAL
Web page: https://aquila.iseg.utl.pt/aquila/departamentos/EC
macro forecasts; fiscal forecasts; EU; Portugal.;
Find related papers by JEL classification:
- C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Longitudinal Data; Spatial Time Series
- E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
- H68 - Public Economics - - National Budget, Deficit, and Debt - - - Forecasts of Budgets, Deficits, and Debt
This paper has been announced in the following NEP Reports:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- 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.
- Álvaro Pina & Nuno Venes, 2007. "The Political Economy of EDP Fiscal Forecasts: An Empirical Assessment," Working Papers 2007/23, Department of Economics at the School of Economics and Management (ISEG), Technical University of Lisbon..
- Carlos Fonseca Marinheiro, 2010. "Fiscal sustainability and the accuracy of macroeconomic forecasts: do supranational forecasts rather than government forecasts make a difference?," GEMF Working Papers 2010-07, GEMF - Faculdade de Economia, Universidade de Coimbra.
- Jürgen Hagen, 2010. "Sticking to fiscal plans: the role of institutions," Public Choice, Springer, vol. 144(3), pages 487-503, September.
- Stephan, Andreas & Brück, Tilman, 2005.
"Do Eurozone Countries Cheat with their Budget Deficit Forecasts?,"
Working Paper Series
2005,5, European University Viadrina Frankfurt (Oder), The Postgraduate Research Programme Capital Markets and Finance in the Enlarged Europe.
- Tilman Brück & Andreas Stephan, 2006. "Do Eurozone Countries Cheat with their Budget Deficit Forecasts?," Kyklos, Wiley Blackwell, vol. 59(1), pages 3-15, 02.
- Tilman Brück & Andreas Stephan, 2005. "Do Eurozone Countries Cheat with Their Budget Deficit Forecasts?," Discussion Papers of DIW Berlin 508, DIW Berlin, German Institute for Economic Research.
- António Afonso, 2009.
"Long-term Government Bond Yields and Economic Forecasts: Evidence for the EU,"
2009/38, Department of Economics at the School of Economics and Management (ISEG), Technical University of Lisbon..
- Antonio Afonso, 2010. "Long-term government bond yields and economic forecasts: evidence for the EU," Applied Economics Letters, Taylor and Francis Journals, vol. 17(15), pages 1437-1441.
- Rossana Merola & Javier J. Pérez, 2012. "Fiscal forecast errors: governments vs independent agencies?," Banco de Espaï¿½a Working Papers 1233, Banco de Espa�a.
- António Afonso, 2013. "Anatomy of a fiscal débacle: the case of Portugal," Working Papers 2013/01, Department of Economics at the School of Economics and Management (ISEG), Technical University of Lisbon..
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Vitor Escaria).
If references are entirely missing, you can add them using this form.