Budgetary Forecasts in Europe - the Track Record of Stability and Convergence Programmes

47 Pages Posted: 19 May 2004

Date Written: February 2004

Abstract

We analyse the performance of budgetary and growth forecasts of all stability and convergence programmes submitted by EU member states over the last decade. Differences emerge for the bias in budgetary projections across countries. As a second step we explore whether economic, political and institutional factors can explain this pattern. Our analysis indicates that the cyclical position and the form of fiscal governance are major determinants of forecast biases. Projected changes in the budgetary position are mainly affected by the cycle, the need of convergence before EMU and by electoral cycles.

Keywords: Fiscal forecasting, forecast evaluation, budget processes, stability and growth pact

JEL Classification: C53, E17, H62

Suggested Citation

Strauch, Rolf, Budgetary Forecasts in Europe - the Track Record of Stability and Convergence Programmes (February 2004). ECB Working Paper No. 307. Available at SSRN: https://ssrn.com/abstract=515069

Rolf Strauch (Contact Author)

European Central Bank (ECB) ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany

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