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Short and long-term forecasting by the Netherlands Bureau for Economic Policy Analysis (CPB): science, witchcraft, or practical tool for policy?

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  • Bos, Frits
  • Teulings, Coen

Abstract

This paper discusses five different types of forecasts by CPB: forecasts for next year, forecasts for next period of government, analyses of the sustainability of public finance, long-term scenarios and long-term effects of election platforms. CPB forecasts for next year and for the next period of government should be seen as well-motivated estimates based on all recent information, plausible assumptions and expected trends. The more distant the look into the future, the more uncertain are the forecasts. For such long-term analyses, the CPB employs scenarios, extended sensitivity analyses and identification of major political choices. Policy making is like sailing in fog. The regular set of CPB forecasts helps to look forward and to monitor whether a change of course is necessary. Despite fundamental uncertainty about the future, the CPB forecasts provide a good base for political discussions and decision making, like a coalition agreement, budget and wage rate negotiations and defining a long-term policy strategy. These forecasts inform Dutch society, reduce transaction costs in economic and political decision making, and foster consensus on economic and fiscal policy.

Suggested Citation

  • Bos, Frits & Teulings, Coen, 2013. "Short and long-term forecasting by the Netherlands Bureau for Economic Policy Analysis (CPB): science, witchcraft, or practical tool for policy?," MPRA Paper 57564, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:57564
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    References listed on IDEAS

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    1. Carmen M. Reinhart & Kenneth S. Rogoff, 2014. "This Time is Different: A Panoramic View of Eight Centuries of Financial Crises," Annals of Economics and Finance, Society for AEF, vol. 15(2), pages 1065-1188, November.
    2. Rocus van Opstal, 2006. "Charting choices 2008-2011: economic effects of eight election platforms," CPB Document 139, CPB Netherlands Bureau for Economic Policy Analysis.
    3. Carmen M. Reinhart & Kenneth S. Rogoff, 2009. "Varieties of Crises and Their Dates," Introductory Chapters,in: This Time Is Different: Eight Centuries of Financial Folly Princeton University Press.
    4. Frits Bos, 2008. "The Dutch fiscal framework: History, current practice and the role of the central planning bureau," OECD Journal on Budgeting, OECD Publishing, vol. 8(1), pages 1-42.
    5. Raghuram G. Rajan, 2005. "Has financial development made the world riskier?," Proceedings - Economic Policy Symposium - Jackson Hole, Federal Reserve Bank of Kansas City, issue Aug, pages 313-369.
    6. Coen Teulings & Frits Bos, 2010. "CPB and Dutch fiscal policy in view of the financial crisis and ageing," CPB Document 218, CPB Netherlands Bureau for Economic Policy Analysis.
    7. Bas ter Weel & Albert van der Horst & George Gelauff, 2010. "Strengthen cities to prepare the Netherlands for the future," CPB Special Publication 88, CPB Netherlands Bureau for Economic Policy Analysis.
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    Citations

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    Cited by:

    1. Frits Bos & Thomas van der Pol & Gerbert Romijn, 2018. "Should CBA’s include a correction for the marginal excess burden of taxation?," CPB Discussion Paper 370, CPB Netherlands Bureau for Economic Policy Analysis.
    2. Bos, Frits & Zwaneveld, Peter, 2017. "Cost-benefit analysis for flood risk management and water governance in the Netherlands; an overview of one century," MPRA Paper 80933, University Library of Munich, Germany.
    3. Klink, Ab & Schakel, H. Christiaan & Visser, Sander & Jeurissen, Patrick, 2017. "The arduous quest for translating health care productivity gains into cost savings. Lessons from their evolution at economic scoring agencies in the Netherlands and the US," Health Policy, Elsevier, vol. 121(1), pages 1-8.

    More about this item

    Keywords

    macroeconomic forecasting and government policy; accuracy of forecasts; uncertainty and public decision making; measurement in economics; CPB Netherlands Bureau for Economic Policy Analysis;

    JEL classification:

    • A11 - General Economics and Teaching - - General Economics - - - Role of Economics; Role of Economists
    • C0 - Mathematical and Quantitative Methods - - General
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • E17 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Forecasting and Simulation: Models and Applications
    • F17 - International Economics - - Trade - - - Trade Forecasting and Simulation
    • F47 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Forecasting and Simulation: Models and Applications
    • G17 - Financial Economics - - General Financial Markets - - - Financial Forecasting and Simulation
    • H68 - Public Economics - - National Budget, Deficit, and Debt - - - Forecasts of Budgets, Deficits, and Debt

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