Since the outbreak of the European debt crisis, fiscal sustainability as a research area became more and more popular. This paper aims to assess the predicting power of the basic types of the following five fiscal sustainability indicators: primary gap (1), stationary tests for public debt (2),...

We study the loss function of 15 European governments as implied by their budget balance forecasts. Results suggest that the shape of the loss function varies across countries. The loss function becomes more asymmetric as the forecast horizon increases and in advance of parliamentary election....

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...

The fact that the literature tends to find optimistic biases in national fiscal projections has led to a growing recognition in the academic and policy arenas of the need for independent forecasts in the fiscal domain, prepared by independent agencies, such as the European Commission in the case...

Using a sample of the 48 contiguous United States, we consider the problem of forecasting state and local governments' revenues and expenditures in real time using models that feature mixed-frequency data. We find that single-equation mixed data sampling (MIDAS) regressions that predict...

Budget credibility, or the ability of governments to accurately forecast macro-fiscal variables, is crucial for effective public finance management. Fiscal marksmanship analysis captures the extent of errors in the budgetary forecasting. The fiscal rules can determine fiscal marksmanship, as...

Budget credibility, or the ability of governments to accurately forecast macro-fiscal variables, is crucial for effective public finance management. Fiscal marksmanship analysis captures the extent of errors in the budgetary forecasting. The fiscal rules can determine fiscal marksmanship, as...

While fiscal forecasting and monitoring has its roots in the accountability of governments for the use of public funds in democracies, the Stability and Growth Pact has significantly increased interest in budgetary forecasts in Europe, where they play a key role in the EU multilateral budgetary...

Does budget transparency effectively limit the use of creative accounting to circumvent fiscal rules? Through examining a Spanish reform that limited the obligation to provide regular budget information, I study the effect of relaxing transparency rules on budget forecast errors. After the...

This study provides evidence that state budget officials give biased forecasts. Specifically, in gubernatorial election years, state budget officers overestimate the growth in state personal income, U.S. personal income, and state revenues by 1.3%, 1%, and 2%, respectively. These biases are even...