Joint evaluation of the directional accuracy of federal budget forecasts

Research output: Contribution to journalArticlepeer-review

Abstract

Most research focused on deficit, revenue and outlay in budget forecasts has addressed these issues separately. In this study, we investigate changes in budget forecasts from the Congressional Budget Office, applying a recently developed market-timing test. We find that the combined forecasts of revenue and outlay are useful with a horizon of 8 months in predicting an increase/decrease, and useful with a horizon of up to 20 months in predicting an acceleration/deceleration in the deficit.

Original languageEnglish
Pages (from-to)582-585
Number of pages4
JournalApplied Economics Letters
Volume21
Issue number8
DOIs
Publication statusPublished - 2014 May
Externally publishedYes

Keywords

  • directional analysis
  • forecast evaluation
  • government forecasts
  • market-timing test
  • nonparametric methods

ASJC Scopus subject areas

  • Economics and Econometrics

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