Real-Time Data and Fiscal Policy Analysis: A Survey of the Literature

Cimadomo, Jacopo

doi:10.21799/frbp.wp.2011.25

Cited by 11 publications

(10 citation statements)

References 28 publications

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“…Brück and Stephan (2006) and Pina and Venes (2011) investigate the political determinants of forecast errors in fiscal policy, while controlling for economic variables. For a survey of the literature, see Cimadomo (2011).…”

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confidence: 99%

From Budgetary Forecasts to Ex Post Fiscal Data: Exploring the Evolution of Fiscal Forecast Errors in the European Union

Beetsma¹,

Bluhm²,

Giuliodori³

et al. 2012

Contemporary Economic Policy

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This paper splits the ex post error in the budget balance, defined as the final budget figure minus the planned figure, into implementation and revision errors, and investigates the determinants of these errors. The implementation error is the difference between the nowcast, published toward the end of the year of budget implementation, and the planned budget, while the revision error is the difference between the final figure and the nowcast. The split takes account of differences in reporting incentives at the different budgeting stages. The predictive content of fiscal plans is important, because it determines the reliability of the budget, while that of the nowcasts is important also because these figures are an input for the next budget and may contain important signals about the fiscal stance. Implementation and revision errors may arise for political and strategic reasons. 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, increases the quality of budgetary reporting at both the planning and the nowcast stage. This supports the recently adopted requirements on national fiscal frameworks. It also strengthens the case for a close monitoring by the European Commission of national budgeting. (JEL E6, H6)

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confidence: 99%

From Budgetary Forecasts to Ex Post Fiscal Data: Exploring the Evolution of Fiscal Forecast Errors in the European Union

Beetsma¹,

Bluhm²,

Giuliodori³

et al. 2012

Contemporary Economic Policy

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“…Studies based on first-release or real-time data are those of Forni and Momigliano (2004), Cimadomo (2008), Beetsma and Giuliodori (2009) and Beetsma et al (2009, 2012). Beetsma and Giuliodori (2009) explore the determinants of fiscal plans and their implementation for OECD countries over the period 1995–2006, including how fiscal policy responds to new information, especially on the business cycle.…”

Section: A Review Of the Literaturementioning

confidence: 99%

“…They find that first-release data are biased estimators of the final figures, which impinge on the programming of the next budget and on fiscal surveillance. Finally, Forni and Momigliano (2004) and Cimadomo (2008) focus on the importance of estimating fiscal reaction functions including real-time information on the output gap at the moment the budget was prepared.…”

Section: A Review Of the Literaturementioning

confidence: 99%

“…By investigating the nature and sources of budgetary slippages in Italy, we contribute to the literature on the determinants of both fiscal plans and actual policies (e.g. Forni and Momigliano 2004; Cimadomo 2008; Beetsma and Giuliodori 2009; Beetsma et al 2009). Moreover, we draw a comprehensive picture of the characteristics of fiscal forecasting, which is paradigmatic and could be usefully applied to other countries.…”

Section: Introductionmentioning

confidence: 99%

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Budgeting and implementing fiscal policy in Italy

Cepparulo¹,

Gastaldi

Giuriato

et al. 2014

J. Pub. Pol.

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Forecast errors in budgetary variables are frequent. When systematic, they are a source of concern as they signal misconduct in fiscal policy-making, undermine the government’s credibility and compromise long-term fiscal sustainability. This paper analyzes the characteristics of fiscal forecasting and implementation errors in Italy using real-time data over the period 1998-2009. Several empirical methods are applied in order to identify the features of the policymakers’ behavior in preparing and implementing annual fiscal policy, and to discover potential determinants in the formation of the implementation errors. Our results show that implemented budgetary plans fall systematically short of one-year ahead ambitious planned adjustments for the main public finance aggregates. Fiscal illusion dominates revenue and GDP forecasting, and preliminary data releases are severely biased estimators of the final data, especially for expenditures. The role of the parliamentary session in driving a severe expenditure drift is confirmed

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“…It does not address other questions, such as which deficit best shows the effect of fiscal policy on aggregate demand (the best measure might give different weights to different types of spending and revenue), how the deficit should be adjusted for the effects of inflation (which can cause government spending to be overstated since a portion of interest expense is really the repayment of principal), or how the deficit can be adjusted to isolate the effects of changes in government policy from those of the business cycle. (On these questions, see Blejer and Cheasty, , ; for recent reviews of the political economy of deficits and the differences between forecast and actual deficits, among other things, see Eslava, , and Cimadomo, , respectively).…”

Section: Introductionmentioning

confidence: 99%

Defining the Government's Debt and Deficit

Irwin

2015

Journal of Economic Surveys

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Abstract. Although the budget deficit and the public debt feature prominently in political debate and economic research, there is no agreement about how they should be measured. They can be defined for different sets of public institutions, including the nested sets corresponding to central government, general government, and the public sector, and, for any definition of government, there are many measures of the debt and deficit, including those generated by four kinds of accounts (cash, financial, full accrual, and comprehensive), which can be derived from four nested sets of assets and liabilities. Each debt and deficit measure says something about public finances, but none tells the whole story. Each is also vulnerable to manipulation, and is likely to be manipulated if it is subject to a binding fiscal rule or target. Narrow definitions of government encourage the shifting of spending to entities outside the defined perimeter of government. Narrow definitions of debt and deficit encourage operations involving off-balance-sheets assets and liabilities, while broad measures are susceptible to the mismeasurement of on-balance-sheet assets and liabilities. Reviewing the literature on these issues, the paper concludes that governments should publish several measures of the debt and deficit in a form that clearly reveals their interrelationships.

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Real-Time Data and Fiscal Policy Analysis: A Survey of the Literature

Cited by 11 publications

References 28 publications

From Budgetary Forecasts to Ex Post Fiscal Data: Exploring the Evolution of Fiscal Forecast Errors in the European Union

From Budgetary Forecasts to Ex Post Fiscal Data: Exploring the Evolution of Fiscal Forecast Errors in the European Union

Budgeting and implementing fiscal policy in Italy

Defining the Government's Debt and Deficit

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