WORKING PAPER

WORKING PAPER

TAX REVENUE FORECAST ERRORS: WRONG PREDICTIONS OF THE TAX BASE OR THE ELASTICITY?

(with M. Göttert)

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.

[Working Paper]

Submitted

QUARTERLY GDP ESTIMATES FOR THE GERMAN STATES: NEW DATA FOR BUSINESS CYCLE ANALYSES AND LONG-RUN DYNAMICS

(with I. Wikman)

To date, only annual information on economic activity is published for the 16 German States. In this paper, we calculate quarterly regional GDP estimates for the period between 1995 to 2021, thereby improving the regional database in Germany. The new data set will regularly be updated when quarterly economic growth for Germany becomes available. We use the new data for an in-depth business cycle analysis and to estimate long-run growth dynamics. The business cycle analysis reveals large heterogeneities in the duration and amplitudes of state-specific fluctuations as well as in the degrees of cyclical concordance. Long-run trends are found to vary tremendously, with positive developments in economically strong regions and flat or even negative trends for economically much weaker states.

[Working Paper] [Appendix]

Revise and Resubmit: Oxford Bulletin of Economics and Statistics

REGIONAL INDUSTRIAL EFFECTS IN GERMANY FROM A POTENTIAL GAS DEFICIT

(with C. Schult)

We estimate potential regional industrial effects in case of a threatening gas deficit. For Germany, the reduction leads to a potential decrease in industrial value added by 1.6%. The heterogeneity across German states is remarkable, ranging from 2.2% for Rhineland-Palatinate to 0.7% for Hamburg. We emphasize the need for regional input-output tables to conduct economic analysis on a sub-national level, particularly when regional industrial structures are heterogeneous. The approximation with national figures can lead to results that differ both in magnitude and relative regional exposure. Our findings highlight that more accurate policy guidance can be achieved by improving the regional database.

[Working Paper] [Appendix]

Submitted

FROM SHOPPING TO STATISTICS: TRACKING AND NOWCASTING PRIVATE CONSUMPTION EXPENDITURES IN REAL-TIME

(with F. Fourné)

In this paper, we use high-frequency transaction data to develop a weekly tracker for private consumption expenditures. Furthermore, we apply the transaction data in a nowcasting experiment and compare their performance with other, readily available indicators that are regularly linked to private consumption in Germany. The weekly tracker produces precise estimates and can thus be used in real-time, especially in very turbulent times such as a pandemic or the high-inflation-phase in its aftermath. In terms of nowcast accuracy, the tracker outperforms all remaining indicators, making it a powerful tool for applied forecasting work. We plan to regularly publish the weekly consumption tracker in the future, thereby complementing the database for Germany.

[Working Paper] [Appendix]

Submitted

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

WHAT DRIVES GERMAN TREND GDP GROWTH? A DISAGGREGATED SECTORAL VIEW

(with L. Zarges)

In this paper, we apply a multivariate unobserved components model estimated by Bayesian methods to industrial data in Germany and ask whether and how structural changes taking place in the last five decades affected trend GDP growth. 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