Are the European Commission's forecasts of public finances better than those of national governments? Cover

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Are the European Commission's forecasts of public finances better than those of national governments?

Central European Economic Journal

Volume 7 (2020): Issue 54 (January 2020)

By: Jakub Rybacki

Open Access

|Oct 2020

Figures & Tables

Cross-sectional fixed effects of the model

Horizon	Current year			Next year
Variable	Balance	Expenditure	Revenue	Balance	Expenditure	Revenue
Belgium	0.00	−0.13	0.12	−0.02	−0.22	−0.86
Germany	0.11	−0.18	0.45	0.51	0.24	−0.03
Estonia	0.07	0.34	0.50	0.31	0.22	−0.93
Ireland	−0.19	−1.25	0.41	−1.29	−4.83	1.47
Spain	0.10	−0.14	0.00	0.87	0.43	−2.30
France	−0.08	−0.12	0.22	0.37	0.73	−0.45
Italy	−0.06	−0.24	0.26	1.01	0.63	−0.44
Cyprus	−0.64	−0.32	−20.02	0.45	−2.30	−1.13
Latvia	−0.09	0.17	0.54	0.25	1.94	1.76
Lithuania	−0.39	1.27	0.18	−0.02	1.08	−0.06
Luxembourg	−0.16	−0.36	1.69	−1.03	−0.11	3.10
Malta	−0.30	−0.24	1.20	−0.55	−0.75	1.82
Netherlands	−0.06	−0.05	−0.03	0.32	0.63	−0.35
Austria	−0.07	−0.22	0.22	0.17	0.24	−0.61
Portugal	0.13	0.11	−0.54	0.16	−1.02	−2.11
Slovenia	−0.21	−0.37	0.71	−0.71	0.12	−0.72
Slovakia	0.07	1.82	1.89	0.35	5.18	3.54
Finland	0.12	−0.21	0.37	0.23	−0.64	−0.79
Bulgaria	0.65	−1.90	0.40	−0.69	−3.14	0.44
Czech Republic	−0.19	−0.40	0.09	−0.05	−0.09	0.21
Denmark	1.18	−0.39	1.65	1.16	0.54	1.07
Croatia	−0.35	−0.47	0.15	−3.61	−2.35	−0.23
Hungary	−0.11	0.23	0.48	0.25	0.79	−0.06
Poland	0.60	2.60	0.76	−0.19	0.55	−0.85
Romania	−0.14	0.47	0.91	0.45	0.43	−0.36
Sweden	−0.08	−0.16	0.24	0.02	0.19	−0.82
United Kingdom	−0.05	−0.21	0.46	0.57	0.05	−0.45

The difference in squared forecast errors – model

Horizon	Current year			Next year

Variable	Balance	Expenditure	Revenue	Balance	Expenditure	Revenue
Model – β₀	0.08	0.19	−0.36	−0.33	−0.25	0.3
	0.05	0.14	0.49	0.13	0.26	0.23
	1.59 (0.12)	1.39 (0.17)	−0.73 (0.47)	−2.57 (0.01)	−0.95 (0.34)	1.31 (0.19)

R²	0.29	0.24	0.28	0.34	0.34	0.28

Observations	159	159	159	132	132	132

Periods	6	6	6	5	5	5
Cross sections	27	27	27	27	27	27

Redundant fixed effects – test

Horizon	Current year			Next year
Variable	Balance	Expenditure	Revenue	Balance	Expenditure	Revenue
Cross-sectional F	1.68 (0.03)	1.36 (0.13)	1.67 (0.03)	1.70 (0.03)	1.66 (0.04)	1.29 (0.19)
Cross-sectional chi-square	46.89 (0.01)	39.18 (0.05)	46.73 (0.01)	47.91 (0.01)	47.07 (0.01)	37.83 (0.06)
Period F	1.47 (0.20)	1.05 (0.39)	0.96 (0.44)	2.23 (0.07)	2.26 (0.07)	1.53 (0.20)
Period chi-square	8.92 (0.11)	6.43 (0.27)	5.91 (0.32)	11.14 (0.03)	11.31 (0.02)	7.77 (0.10)
Cross-section/period F	1.65 (0.03)	1.31 (0.15)	1.56 (0.04)	1.76 (0.02)	1.74 (0.02)	1.33 (0.15)
Cross-section/period chi-square	53.81 (0.01)	44.05 (0.06)	51.39 (0.01)	55.41 (0.00)	55.06 (0.00)	44.05 (0.05)

Time period fixed effects of the model

Horizon	Current year			Next year
Variable	Balance	Expenditure	Revenue	Balance	Expenditure	Revenue
2014	0.04	−0.32	0.00	−0.20	0.63	1.13
2015	−0.12	−0.36	−0.26	−0.42	−1.56	−0.45
2016	−0.19	−0.17	0.61	−0.01	0.29	0.05
2017	0.05	0.57	1.21	−0.07	0.30	−0.42
2018	−0.02	0.15	0.58	0.70	0.34	−0.31
2019	0.25	0.13	−2.15

DOI: https://doi.org/10.2478/ceej-2020-0013 | Journal eISSN: 2543-6821 | Journal ISSN: 2544-9001

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Language: English

Page range: 101 - 109

Published on: Oct 31, 2020

Published by: Faculty of Economic Sciences, University of Warsaw

In partnership with: Paradigm Publishing Services

Publication frequency: 1 issue per year

Keywords:

fiscal forecasts,

convergence programme

Related subjects:

Business and economics,

Political economics,

Economic theory, systems and structures,

Microeconomics,

Macroeconomics,

Economic policy

© 2020 Jakub Rybacki, published by Faculty of Economic Sciences, University of Warsaw
This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

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