{"title":"The Impact of Forecast Errors on Fiscal Planning and Debt Accumulation","authors":"Marten Ademmer, Jens Boysen-Hogrefe","doi":"10.1515/jbnst-2020-0054","DOIUrl":null,"url":null,"abstract":"Abstract We investigate the impact of errors in medium run tax revenue forecasts on the final budget balance. Our analysis is based on fiscal data for the entirety of German states and takes advantage of revenue forecasts and respective errors that can be considered as exogenously given in the budgeting process. We find that forecast errors at various forecast horizons translate considerably into the final budget balance, indicating that expenditure plans get only marginally adjusted when revenue forecasts get revised. Consequently, errors in tax revenue forecasts may considerably affect the accumulation of public debt. Our calculations suggest that a significant share of total debt of German states results from forecasts that were too optimistic.","PeriodicalId":45967,"journal":{"name":"Jahrbucher Fur Nationalokonomie Und Statistik","volume":"242 1","pages":"171 - 190"},"PeriodicalIF":1.1000,"publicationDate":"2022-02-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"3","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Jahrbucher Fur Nationalokonomie Und Statistik","FirstCategoryId":"96","ListUrlMain":"https://doi.org/10.1515/jbnst-2020-0054","RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q3","JCRName":"ECONOMICS","Score":null,"Total":0}
引用次数: 3
Abstract
Abstract We investigate the impact of errors in medium run tax revenue forecasts on the final budget balance. Our analysis is based on fiscal data for the entirety of German states and takes advantage of revenue forecasts and respective errors that can be considered as exogenously given in the budgeting process. We find that forecast errors at various forecast horizons translate considerably into the final budget balance, indicating that expenditure plans get only marginally adjusted when revenue forecasts get revised. Consequently, errors in tax revenue forecasts may considerably affect the accumulation of public debt. Our calculations suggest that a significant share of total debt of German states results from forecasts that were too optimistic.
期刊介绍：
Die Jahrbücher für Nationalökonomie und Statistik existieren seit dem Jahr 1863. Die Herausgeber fühlen sich der Tradition verpflichtet, die Zeitschrift für kritische, innovative und entwicklungsträchtige Beiträge offen zu halten. Weder thematisch noch methodisch sollen die Veröffentlichungen auf jeweils herrschende Lehrmeinungen eingeengt werden.
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