Real-Time Measures of the Output Gap and Fiscal Policy Stance

Tuomo Virkola

No 37, ETLA Reports from The Research Institute of the Finnish Economy

Abstract: Abstract This paper studies real-time measures of the output gap and fiscal policy stance estimates for EU countries. We construct a comprehensive real-time data set on fiscal forecasts and study whether there are systematic differences between the European Commission and IMF estimates of the output gap and structural budget balance. We argue that differences in the EC and the IMF estimates should provide a lower bound for the potential heterogeneity that is likely to emerge when national governments begin to release their estimates of the output gap and structural budget balance as required by the new fiscal rules in the EU. We find evidence that while the two institutions are likely to agree on cyclical conditions and fiscal policy measures in EU countries after the fact, there are statistically significant differences in their real-time estimates of the output gap and structural budget balance.

Keywords: Business cycles; Fiscal policy; Forecasting (search for similar items in EconPapers)
JEL-codes: E32 E62 H68 (search for similar items in EconPapers)
Pages: 22 pages
Date: 2014-10-31
New Economics Papers: this item is included in nep-eec, nep-mac and nep-pbe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.etla.fi/wp-content/uploads/ETLA-Raportit-Reports-37.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:rif:report:37

Ordering information: This working paper can be ordered from
https://www.etla.fi/ ... iscal-policy-stance/

Access Statistics for this paper

More papers in ETLA Reports from The Research Institute of the Finnish Economy Contact information at EDIRC.
Bibliographic data for series maintained by Kaija Hyvönen-Rajecki ().