Real-Time Macro Monitoring and Fiscal Policy

33 Pages Posted: 10 Feb 2015

See all articles by Eduardo Ley

Eduardo Ley

World Bank

Florian Misch

ZEW – Leibniz Centre for European Economic Research

Multiple version iconThere are 2 versions of this paper

Date Written: December 19, 2014


This paper considers the effects of inaccurate real-time output data on fiscal policy, both with respect to budgetary planning and fiscal surveillance. As newer and better information becomes available, output data available in real time get revised and are likely to conflict with final figures that are only released some years later. By contrast, fiscal policy is inevitably based on real-time figures. The paper develops a simple but comprehensive modeling framework to formalize the linkages between output data revisions and fiscal policy and combines it with a newly compiled dataset from the International Monetary Fund's World Economic Outlook, comprising final and real-time output data for 175 countries, over a period of 17 years. Based on a simulation exercise, it finds that output data revisions alone may significantly undermine the reliability of real-time estimates of the overall and structural fiscal balances, and that output data revisions may result in unplanned and substantial debt accumulation. The paper also shows that there are significant differences across country income groups.

Keywords: Real-time Output Data, Fiscal Policy, Data Revisions, Public Debt

JEL Classification: E01, E62, H68

Suggested Citation

Ley, Eduardo and Misch, Florian, Real-Time Macro Monitoring and Fiscal Policy (December 19, 2014). ZEW - Centre for European Economic Research Discussion Paper No. 14-122, Available at SSRN: or

Eduardo Ley

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States


Florian Misch (Contact Author)

ZEW – Leibniz Centre for European Economic Research ( email )

P.O. Box 10 34 43
L 7,1
D-68034 Mannheim, 68034

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