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Tax Revenue Forecasts in IMF-Supported Programs

Author

Listed:
  • Mikhail Golosov
  • John R King

Abstract

Year-ahead forecasts of tax revenues incorporated into IMF programs for low-income countries, from 1993 to 1999, are compared with the corresponding outturns. The accuracy of these forecasts was low, with a mean absolute percentage error of 16 percent. Forecasts of tax revenues as a percentage of GDP were biased upwards, but there was no significant bias in forecasts of nominal tax revenues. Upward bias in the tax revenue forecasts was associated with subsequent interruptions to the program, and the length of time between the commencement of the program and the beginning of the year for which the forecast was made.

Suggested Citation

  • Mikhail Golosov & John R King, 2002. "Tax Revenue Forecasts in IMF-Supported Programs," IMF Working Papers 02/236, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:02/236
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    File URL: http://www.imf.org/external/pubs/cat/longres.aspx?sk=16234
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    References listed on IDEAS

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    1. Bryan Campbell & Eric Ghysels, 1997. "An Empirical Analysis of the Canadian Budget Process," Canadian Journal of Economics, Canadian Economics Association, vol. 30(3), pages 553-576, August.
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    3. Mocan, H. Naci & Azad, Sam, 1995. "Accuracy and rationality of state General Fund Revenue forecasts: Evidence from panel data," International Journal of Forecasting, Elsevier, vol. 11(3), pages 417-427, September.
    4. Tim Pike & David Savage, 1998. "Forecasting the public finances in the Treasury," Fiscal Studies, Institute for Fiscal Studies, vol. 19(1), pages 49-62, February.
    5. Francis X. Diebold & Jose A. Lopez, 1995. "Forecast evaluation and combination," Research Paper 9525, Federal Reserve Bank of New York.
    6. Loungani, Prakash, 2001. "How accurate are private sector forecasts? Cross-country evidence from consensus forecasts of output growth," International Journal of Forecasting, Elsevier, vol. 17(3), pages 419-432.
    7. Clements,Michael & Hendry,David, 1998. "Forecasting Economic Time Series," Cambridge Books, Cambridge University Press, number 9780521634809, November.
    8. Auerbach, Alan J., 1999. "On the Performance and Use of Government Revenue Forecasts," National Tax Journal, National Tax Association, vol. 52(4), pages 765-782, December.
    9. Harvey, David & Leybourne, Stephen & Newbold, Paul, 1997. "Testing the equality of prediction mean squared errors," International Journal of Forecasting, Elsevier, vol. 13(2), pages 281-291, June.
    10. Alberto Musso & Steven Phillips, 2002. "Comparing Projections and Outcomes of IMF-Supported Programs," IMF Staff Papers, Palgrave Macmillan, vol. 49(1), pages 1-3.
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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, pages 347-386.
    2. Annette J Kyobe & Stephan Danninger, 2005. "Revenue Forecasting—How is it done? Results from a Survey of Low-Income Countries," IMF Working Papers 05/24, International Monetary Fund.

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