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How reliable are the statistics for the Stability and Growth Pact?

Author

Listed:
  • Luís Gordo Mora
  • João Nogueira Martins

Abstract

The aim of this paper is to assess the reliability of the government deficit and debt figures reported to the European Commission by Member States. Reliability is one of the several dimensions of quality in statistics; it refers to the magnitudes of data revisions after the publication of the first outcomes. The measurement of the data reliability and inference about potential future revisions are particularly relevant for fiscal surveillance in the EU since statistical institutes take a long time - usually four years - to provide final data, while the decisions on the Stability and Growth Pact context are taken on the basis of the first estimates available shortly after the end of each year. The paper shows that there are very significant differences in reliability among Member States and indicates the margins of uncertainty in relation to the most recent years' data. It also compares the reliability of deficit and debt figures; checks that the shift from ESA79 to ESA95 did not generally harm the reliability of data and suggests that the size of deficits may have an impact on the way statistical offices revise data.

Suggested Citation

  • Luís Gordo Mora & João Nogueira Martins, 2007. "How reliable are the statistics for the Stability and Growth Pact?," European Economy - Economic Papers 2008 - 2015 273, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
  • Handle: RePEc:euf:ecopap:0273
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    File URL: http://ec.europa.eu/economy_finance/publications/pages/publication770_en.pdf
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    References listed on IDEAS

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    1. Marco Buti & João Nogueira Martins & Alessandro Turrini, 2007. "From Deficits to Debt and Back: Political Incentives under Numerical Fiscal Rules," CESifo Economic Studies, CESifo, vol. 53(1), pages 115-152, March.
    2. S. Boragan Aruoba, 2008. "Data Revisions Are Not Well Behaved," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 40(2-3), pages 319-340, March.
    3. Fabrizio Balassone & Daniele Franco & Stefania Zotteri, 2006. "EMU fiscal indicators: a misleading compass?," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 33(2), pages 63-87, June.
    4. Fabrizio Balassone & Daniele Franco & Stefania Zotteri, 2007. "The Reliability of EMU FIscal Indicators: Risks and Safeguards," Temi di discussione (Economic working papers) 633, Bank of Italy, Economic Research and International Relations Area.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. 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, September.
    2. 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, vol. 32(1), pages 98-119, January.
    3. Francisco Castro & Javier J. Pérez & Marta Rodríguez‐Vives, 2013. "Fiscal Data Revisions in Europe," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 45(6), pages 1187-1209, September.
    4. Gabriel Quiros & Julia Catz & Wim Haine & Nuno Silva, 2010. "Statistical revision - a European perspective," IFC Bulletins chapters,in: Bank for International Settlements (ed.), The IFC's contribution to the 57th ISI Session, Durban, August 2009, volume 33, pages 219-226 Bank for International Settlements.
    5. 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.
    6. Pedregal, Diego J. & Pérez, Javier J., 2010. "Should quarterly government finance statistics be used for fiscal surveillance in Europe?," International Journal of Forecasting, Elsevier, vol. 26(4), pages 794-807, October.
    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. 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, Faculty of Economics, University of Coimbra.
    9. Martin Larch & João Nogueira Martins, 2007. "Fiscal indicators - Proceedings of the the Directorate-General for Economic and Financial Affairs Workshop held on 22 September 2006 in Brussels," European Economy - Economic Papers 2008 - 2015 297, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.

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