How can independent fiscal institutions make the most of assessing past economic forecasts?

Scott Cameron
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Scott Cameron: OECD

OECD Journal on Budgeting, 2022, vol. 22, issue 2

Abstract: Forecasts of economic variables like GDP, inflation and unemployment are the starting points for budget planning. Most OECD countries have designated an independent fiscal institutions to scrutinise or endorse the economic forecasts prepared by finance ministries. Although external assessments of past forecast errors can help uncover systematic bias or underperformance in official forecasts, there are several conceptual and practical problems with doing so that limit their usefulness. This paper describes the limitations of ex post forecast assessments and offers some suggestions on how independent fiscal institutions can add the most value in providing them.

Keywords: surveillance of public finances; independent fiscal institutions; fiscal council; fiscal discipline; oversight of fiscal policy; macroeconomic forecasting; budget forecasting; fiscal forecasting (search for similar items in EconPapers)
JEL-codes: E37 H60 H61 H68 (search for similar items in EconPapers)
Date: 2022
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