 Don’t blame the government!? An assessment of debt forecast errors with a view to the EU Economic Governance ReviewAlena Bachleitner and Doris Prammer European Journal of Political Economy, 2024, vol. 82, issue C Abstract: In view of the increased importance of debt developments in the EU governance framework, this paper investigates the accuracy and the main economic causes of forecast errors in (government) debt projections. We find a positive average debt forecast error for European Union member states, which increases with the projection horizon. Underestimation of debt growth is particularly relevant for countries with high government debt. The main drivers of the debt forecast errors seem to be partly outside direct government control: Wrongly projected overall GDP developments and stock flow adjustments - a factor which has not been considered in the literature so far. Moreover, the high uncertainty in debt forecasts is also inherent in the European Commission’s benchmark forecasts: only their now-cast remains unbiased. Keywords: Government debt; Debt forecast error; Forecast evaluation; Fiscal rules (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:poleco:v:82:y:2024:i:c:s0176268024000260 DOI: 10.1016/j.ejpoleco.2024.102524 Access Statistics for this article European Journal of Political Economy is currently edited by J. De Haan, A. L. Hillman and H. W. Ursprung More articles in European Journal of Political Economy from Elsevier |
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