Fiscal targets. A guide to forecasters?

Joan Paredes, Javier Pérez and Gabriel Perez Quiros

Journal of Applied Econometrics, 2023, vol. 38, issue 4, 472-492

Abstract: We formulate and estimate empirical models for a selection of EU countries (Germany, France, Italy, Spain, Portugal, and Ireland) to show that ex‐ante government (consumption) targets convey useful information about ex‐post fiscal developments, even if the track record of governments meeting their respective targets is low. The use of targets is particularly valuable when there is limited information about its implementation, for example, at the beginning of a fiscal year, when observed data are scarce. Thus, forecasters would be well advised to use fiscal targets as a guide in creating projections, despite the findings of a well‐established literature that reports that, ex post, governments tend to induce politically motivated biases in policy targets.

Date: 2023
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https://doi.org/10.1002/jae.2968

Related works:
Working Paper: Fiscal targets. A guide to forecasters? (2015)
Working Paper: Fiscal targets. A guide to forecasters? (2015)
Working Paper: Fiscal targets. A guide to forecasters? (2015)
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