Real-Time Macro Monitoring and Fiscal Policy
This paper considers the effects of inaccurate real-time output data on fiscal management, both with respect to budgetary planning and fiscal surveillance. As newer and better information becomes available, output data available in real time get re...
| Main Authors: | , |
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2013
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2013/01/17150429/real-time-macro-monitoring-fiscal-policy http://hdl.handle.net/10986/12194 |
| Summary: | This paper considers the effects of
inaccurate real-time output data on fiscal management, both
with respect to budgetary planning and fiscal surveillance.
As newer and better information becomes available, output
data available in real time get revised and are likely to
conflict with final figures that are only released some
years later. Nevertheless, fiscal policy needs to be
inevitably based on real-time figures. The paper develops a
simple modeling framework to formalize these linkages and
combines it with a newly compiled dataset from the
International Monetary Fund's World Economic Outlook,
comprising final and real-time output data for 175
countries, over a period of 17 years. We simulate the
effects of output revisions on revisions of the overall
balance, the structural balance and debt accumulation. It
finds that output revisions may have substantial effects on
the ability of governments to correctly estimate the overall
balance and the structural fiscal balance in real time, and
that the effects may imply substantial debt accumulation. |
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