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From First-Release to Ex-Post Fiscal Data: Exploring the Sources of Revision Errors in the EU

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  • Beetsma, Roel
  • Bluhm, Benjamin
  • Giuliodori, Massimo
  • Wierts, Peter

Abstract

This paper explores the determinants of deviations of ex-post budget outcomes from first-release outcomes published towards the end of the year of budget implementation. The predictive content of the first-release outcomes is important, because these figures are an input for the next budget and the fiscal surveillance process. Deviations of ex-post from first-release fiscal figures may arise for political and strategic reasons. In particular, Ministries of Finance control the production of first-release figures, and may have an incentive to be over-optimistic at this stage. Our results suggest that an improvement in the quality of institutions, whether measured by the tightness of national fiscal rules, the medium-term budgetary framework or budgetary transparency, reduces the degree of optimism at the first-release stage, thereby making first-release figures more informative about the eventual outcomes. This supports the European Commission proposals for minimum standards for national fiscal frameworks and amendments by the European Parliament for improving national ownership. It also strengthens the case for a close monitoring by the Commission of the first-release production of fiscal figures.

Suggested Citation

  • Beetsma, Roel & Bluhm, Benjamin & Giuliodori, Massimo & Wierts, Peter, 2011. "From First-Release to Ex-Post Fiscal Data: Exploring the Sources of Revision Errors in the EU," CEPR Discussion Papers 8413, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:8413
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Jeffrey Frankel & Jesse Schreger, 2013. "Over-optimistic official forecasts and fiscal rules in the eurozone," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 149(2), pages 247-272, June.
    2. 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.
    3. Jacopo Cimadomo, 2016. "Real-Time Data And Fiscal Policy Analysis: A Survey Of The Literature," Journal of Economic Surveys, Wiley Blackwell, vol. 30(2), pages 302-326, April.
    4. Jeffrey Frankel, 2011. "Over-optimism in forecasts by official budget agencies and its implications," Oxford Review of Economic Policy, Oxford University Press, vol. 27(4), pages 536-562.
    5. Paloviita, Maritta, 2012. "Fiscal planning and implementation : euro area analysis based on real time data," Research Discussion Papers 34/2012, Bank of Finland.
    6. Croushore, Dean & van Norden, Simon, 2014. "Fiscal policy: ex ante and ex post," Working Papers 14-22, Federal Reserve Bank of Philadelphia.
    7. Pessoa, Argentino, 2011. "The Euro Area sovereign debt crisis: Some implications of its systemic dimension," MPRA Paper 35328, University Library of Munich, Germany.
    8. Roel Beetsma & Raymond Gradus, 2012. "A Discussion of the Changes to Europe's Macro-fiscal Framework in Response to the Crisis," CESifo Forum, Ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 13(1), pages 17-23, April.

    More about this item

    Keywords

    base effect; biases; decomposition; denominator effect; ex-post data; first-release data; fiscal institutions; fiscal policy; growth effect; real-time data;

    JEL classification:

    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
    • H6 - Public Economics - - National Budget, Deficit, and Debt

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