Do fiscal opacity, fiscal impulse, and fiscal credibility affect disagreement about economic growth forecasts? Empirical evidence from Brazil considering the period of political instability and presidential impeachment

Gabriel Montes and Paulo Henrique Lourenço Luna

Review of Development Economics, 2022, vol. 26, issue 4, 2356-2393

Abstract: This study investigates the effects of fiscal opacity, fiscal impulse, and fiscal credibility on disagreement about economic growth forecasts. Regarding fiscal opacity, as a novelty, we use an indicator that captures the ignorance of financial market experts about the real budget balance condition. Fiscal impulse is represented by two fiscal impulse indicators, while fiscal credibility is represented by two credibility indexes. The findings suggest an increase in fiscal opacity and the adoption of discretionary fiscal policy raise disagreement about economic growth forecasts. The results suggest that fiscal credibility improvements reduce disagreement about economic growth forecasts.

Date: 2022
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