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WORKING PAPER
WORKING PAPER
Tax Revenue Forecast Errors: Wrong Predictions of the Tax Base or the Elasticity?
CESifo Working Paper No. 9148, 2021
(with M. Göttert)
Submitted
In this paper, we disentangle tax revenue forecast errors into influences stemming from wrong macroeconomic assumptions and false predictions of the elasticities linking the tax base to its corresponding tax type. Across six tax types and the overall tax sum for Germany, we find a heterogeneous degree of relative importance of both sources. Whereas wrong macroeconomic assumptions matter most for profit-related taxes and the wage tax, false predictions of the elasticities mainly drive the forecast errors of the energy tax and the sales taxes. For the overall tax sum, more than two-third of the error can be attributed to wrong macroeconomic predictions and approximately one-third to false assumptions on the elasticity. Our results suggest that outsourcing the macroeconomic projections to an independent forecaster and methodological improvements can reduce tax revenue forecast errors.
Origin of the Tax Forecast Error and Explanatory Power
WORK IN PROGRESS
WORK IN PROGRESS
Economic Forecasting with Spatial Effects: An Assessment for German Districts
In this reserach project, I will apply panel techniques to frecasting annual GDP growth at the German district level. mimeo
The Slowdown in German Trend GDP Growth: Aggregate or State-Specific Factors?
German trend GDP growth is falling for more than three decades. In this paper, I try to identify whether this decline is driven by aggregate and common factors or by state-specific factors and thus by regional features. mimeo
Forecasting Labor Productivity: A New Measure Based on Business Survey Results
(with S. Sauer, K. Wohlrabe and T. Wollmershäuser)
In this paper, we develop a new measure for labor productivity from business survey results and test its properties to forecasting German data. mimeo
A New Composite Business Cycle Indicator for the German States
(with D. Schaller)
In this paper, we introduce a new business cycle indicator for the 16 German states that is based on newly established time series and standard factor models. mimeo
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