Observed Relationships between Economic and Technical Receipts Revisions in Federal Budget Projections

Abstract

This paper presents results illustrating a close relationship between economic and technical errors in receipts projections made by the OMB and the CBO. The specific source appears to be the relationship between economic and technical errors for personal income tax receipts. Receipts projections generally are efficient in the use of prior information, although some evidence exists to suggest that OMB economic receipts revisions are related to prior economic information. The results indicate a greater sensitivity of changes in receipts projections to changes in the performance of the economy than typically realized.