The Highs And Lows Of Revenue Forecasting
- Topics:
- Revenue Forecasting
- Tags:
- Finance,
- Operational Accounting,
- Revenue,
- Revenue Forecast,
- San Diego,
- Tradeoff,
- University Of California
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Overview: The Fiscal Responsibility Laws (FRL) being implemented around the world inevitably involve a tradeoff between fiscal discipline and flexibility. Accurate, unbiased revenue forecasts mitigate this tradeoff by helping policymakers facing stricter anti-deficit laws avoid emergency cuts and helping to realistically assess feasibility of expenditure commitments in countries with more flexible FRLs. Under what conditions can we expect these high quality forecasts? The author uses U.S. state data to identify conditions under which revenue forecasts are less biased and more accurate. I find that political circumstances and institutions for revenue forecasting have economically and statistically significant effects on forecast bias and inaccuracy.
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Format: PDF | Size: 259KB | Date: Jul 2006 | Pages: 39
