Fiscal Forecast Errors: Governments Versus Independent Agencies? ESRI Research Bulletin 2014/1/1

Merola, Rossana and Pérez, Javier J. (2014) Fiscal Forecast Errors: Governments Versus Independent Agencies? ESRI Research Bulletin 2014/1/1. UNSPECIFIED.

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Abstract

Should the role of preparing budgetary projections be delegated to an independent agency? A debate around this issue has arisen in Europe, given the deterioration of governments’ budget balances in many European countries and the lack of accuracy in fiscal projections. Of particular concern is that planned government deficits turned out to consistently exceed budgetary plans by a significant magnitude in recent years. Explanatory factors for these misalignments include unexpected or unplanned large GDP shocks or fiscal stimulus packages. However beyond this, a lack of both transparency and a realistic account of facts may be at fault.

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