Investigating the inefficiency of the CBO’s budgetary projections

Natsuki Arai

International Journal of Forecasting, 2020, vol. 36, issue 4, 1290-1300

Abstract: This paper evaluates the efficiency of budgetary projections issued by the Congressional Budget Office (CBO) from 1984 to 2016 and investigates the cause of their inefficiency. The efficiency of both its budgetary and macroeconomic projections is rejected in many cases, especially for revenue projections. A comparison of forecast evaluations suggests that the inefficiency of revenue projections is likely due to the inefficiency of the underlying macroeconomic projections. By adjusting budgetary projections by the CBO in real time using macroeconomic forecasts by the Survey of Professional Forecasters, the accuracy of the former projections can be significantly improved in some cases, by up to 26% in terms of the root-mean-square prediction error.

Keywords: Congressional budget office; Forecast evaluation; Conditional forecasts; Economic projections; Survey of professional forecasters (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0169207019302730
Full text for ScienceDirect subscribers only

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:eee:intfor:v:36:y:2020:i:4:p:1290-1300

DOI: 10.1016/j.ijforecast.2019.12.008

Access Statistics for this article

International Journal of Forecasting is currently edited by R. J. Hyndman

More articles in International Journal of Forecasting from Elsevier
Bibliographic data for series maintained by Catherine Liu ().