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A Peer-reviewed scientific articles/A1 Journal article (refereed), original research
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Real-time uncertainty in budget planning: Evidence from euro area countries, Journal of Economic Policy Reform 4 (October) (2018). Paloviita, Maritta; Ikonen, Pasi

Category A Peer-reviewed scientific articles
Sub-category A1 Journal article (refereed), original research
auki Internal authors
Ikonen Pasi / Monetary Policy and International Economy
All authors as text Paloviita, Maritta; Ikonen, Pasi 
Number of authors
Status Published
Year of publication 2018 
Date 15.10.2018 
Name of article Real-time uncertainty in budget planning: Evidence from euro area countries 
Name of journal Journal of Economic Policy Reform
Volume of issue 21 
Number of issue 4 (October) 
Pages 281-300 
Abstract Using rich panel data including potential output for euro area countries, we analyse budget balance forecasts and their errors. We find that budget balance forecasts are systematically biased and subject to mean reversion (tendency towards more balanced budgets). A robust result is that errors in budget balance nowcasts contribute to errors in budget balance forecasts. In addition, we find that nowcasted macroeconomic conditions can affect over-optimism in budget balance forecasts. Overall, our results emphasize the central role of nowcasting in the EU fiscal framework.
Free text descriptor in Finnish finanssipolitiikka; julkinen talous; talousarviot; ennusteet; ennustevirheet; euroalue; EU; 
Free text descriptor in English Fiscal policy, real-time data, economic crisis 
JEL-codes E62, E32 
ISSN / e-ISSN 1748-7889 
auki Internet addresses