Fiscal policy: ex ante and ex post

Dean Croushore and Simon van Norden ()

No 14-22, Working Papers from Federal Reserve Bank of Philadelphia

Abstract: The surge in fiscal deficits since 2008 has put a renewed focus on the authors? understanding of fiscal policy. The interaction of fiscal and monetary policy during this period has also been the subject of much discussion and analysis. This paper gives new insight into past fiscal policy and its influence on monetary policy by examining the U.S. Federal Reserve Board staff?s Greenbook forecasts of fiscal policy. The authors create a real-time database of the Greenbook forecasts of fiscal policy, examine the forecast performance in terms of bias and effciency, and explore the implications for the interaction of fiscal policy and monetary policy. The authors also attempt to provide advice for fiscal policy by showing how policymakers learn over time about the trajectory of the U.S. federal government?s fiscal balance as well as the changing roles of structural and cyclical factors.

Keywords: Fiscal policy; Deficits; Forecasting; FOMC; Greenbook (search for similar items in EconPapers)
JEL-codes: E62 H68 (search for similar items in EconPapers)
Pages: 53 pages
Date: 2014-09-22
New Economics Papers: this item is included in nep-mac, nep-pbe and nep-pub
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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