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Fiscal policy: ex ante and ex post

Author

Listed:
  • Simon van Norden
  • Dean Croushore

    (University of Richmond
    Ohio State University
    Federal Reserve Bank of Philadelphia)

Abstract

The surge in fiscal deficits since 2008 has put a renewed focus on the authors? understanding of fiscal policy. The interaction of fiscal and monetary policy during this period has also been the subject of much discussion and analysis. This paper gives new insight into past fiscal policy and its influence on monetary policy by examining the U.S. Federal Reserve Board staff?s Greenbook forecasts of fiscal policy. The authors create a real-time database of the Greenbook forecasts of fiscal policy, examine the forecast performance in terms of bias and effciency, and explore the implications for the interaction of fiscal policy and monetary policy. The authors also attempt to provide advice for fiscal policy by showing how policymakers learn over time about the trajectory of the U.S. federal government?s fiscal balance as well as the changing roles of structural and cyclical factors.

Suggested Citation

  • Simon van Norden & Dean Croushore, 2014. "Fiscal policy: ex ante and ex post," Working Papers 14-22, Federal Reserve Bank of Philadelphia, revised 22 Sep 2014.
  • Handle: RePEc:fip:fedpwp:14-22
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    References listed on IDEAS

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    5. 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.
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    Cited by:

    1. Jeffrey A. Frankel & Jesse Schreger, 2016. "Bias in Official Fiscal Forecasts: Can Private Forecasts Help?," NBER Working Papers 22349, National Bureau of Economic Research, Inc.

    More about this item

    Keywords

    Fiscal policy; FOMC; Deficits; Greenbook; Forecasting;

    JEL classification:

    • H68 - Public Economics - - National Budget, Deficit, and Debt - - - Forecasts of Budgets, Deficits, and Debt
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy

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