Darvas, Zsolt, (2016), “The structural budget balance limbo”, Bruegel, 7 April
Revision of an estimate when new data becomes available is quite natural. Also, in some years the methodologies used to estimate potential output and the structural balance were revised. It is better to revise an initial estimate when it turns out later that it was incorrect than to continue using an incorrect estimate. But the problem is that the EU fiscal framework specifies short-term numerical targets for both the level and the change in the structural budget balance. Therefore, imprecision in the estimates can translate into fiscal policy decisions.
Relevant Posts
- Merler, S. (2015) “Greece: update on public finances – the State primary budget balance has returned almost in line with the target, but mostly due to expenditure cuts. Revenues continue to underperform“, Bruegel Institute, 16 March
- Veugelers, Reinhilde, (2016), “Getting the most from public R&D spending in times of budgetary austerity”, Bruegel, 24 February