Growth forecast errors and fiscal multipliers

Olivier Blanchard and Daniel Leigh

This paper investigates the relation between growth forecast errors and planned fiscal consolidation during the crisis. We find that, in advanced economies, stronger planned fiscal consolidation has been associated with lower growth than expected, with the relation being particularly strong, both statistically and economically, early in the crisis. A natural interpretation is that fiscal multipliers were substantially higher than implicitly assumed by forecasters. The weaker relation in more recent years may reflect in part learning by forecasters and in part smaller multipliers than in the ea

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Year of publication:	2013
Authors:	Blanchard, Olivier ; Leigh, Daniel
Publisher:	Washington, DC : IMF
Subject:	Haushaltskonsolidierung \| Fiscal consolidation \| Multiplikator \| Multiplier \| Wirtschaftswachstum \| Economic growth \| Wirtschaftsprognose \| Economic forecast

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Extent:	Online-Ressource (42 S.) graph. Darst.
Series:	IMF working papers. - Washington, DC : IMF, ZDB-ID 2108494-4. - Vol. 13/1
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Arbeitspapier ; Working Paper ; Graue Literatur ; Non-commercial literature
Language:	English
Notes:	"January 2013 "Research Department Includes bibliographical references Systemvoraussetzungen: Acrobat Reader Cover; Contents; I. Introduction; II. Forecast Errors and Fiscal Consolidation Forecasts; A. Specification and Data; B. Results; III. Robustness; A. Choice of Economies and Role of Outliers; B. Controlling for Other Variables; Actual vs. Planned Fiscal Consolidation; C. Different Forecast Vintages; IV. Extensions; A. Government Spending and Revenue; B. Components of Aggregate Spending and Unemployment; C. Alternative Forecasts; V. Conclusions; Appendix; References; Tables; Table 1. Main Results; Table 2. Europe: Robustness to Additional Controls; Table 3. Europe: Two-stage Least Squares Table 4. 2009-12 Panel of ForecastsTable 5. Europe: Government Revenue and Spending; Table 6. Europe: Unemployment and GDP Components; Table 7. Europe: Alternative Forecasters; Appendix Table 1. Europe: Controlling for Ex-post Developments; Appendix Table 2. All Advanced Economies: Robustness to Additional Controls; Appendix Table 3. Europe: 2009-12 Panel of Forecasts, Robustness to Additional Controls; Appendix Table 4. Europe: 2009-12 Panel of Forecasts, Time-Varying β, Robustness to Additional Controls Appendix Table 5. Europe: 2009-12 Panel of Forecasts, Robustness to Additional Controls, Time-Varying β and γAppendix Table 6. Europe: 2009-12 Panel of Forecasts, Controlling for Vulnerability Rating; Figures; Figure 1. Europe: Growth Forecast Errors vs. Fiscal Consolidation Forecasts; Figure 2. Europe: 2009-12 Panel Growth Forecast Errors vs. Fiscal Consolidation Forecasts; Figure 3. All Advanced Economies: 2009-12 Panel Growth Forecast Errors vs. Fiscal Consolidation Forecasts Electronic reproduction; Available via World Wide Web
ISBN:	978-1-4755-7644-3 ; 1-4755-2390-4 ; 978-1-4755-2390-4
Source:	ECONIS - Online Catalogue of the ZBW

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