Government Forecasts Research Articles

Firms’ economic growth expectations and reactions to micro and macro news in Japan

ABSTRACT This study investigates whether firms’ expectations of aggregate output growth overreact or underreact to micro and macro news by examining firm surveys conducted by a Japanese newspaper company, Nikkei. We capture micro news measured by forecast revisions and macro news measured by a new variable, the Japanese government’s growth forecast and that of professional forecasters’ consensus. We found that firms’ economic growth expectations overreact only to macro news. Our results indicate the heterogeneity of firm expectations formation across target variables and news types. Our findings suggest that firms excessively rely on government forecasts in turbulent times. The overreaction of firms’ output growth expectations to the government’s forecast may be associated with their lower performance, and that the government’s macroeconomic forecasts play a role in macroeconomic performance through firms’ expectation channels.

Dinamika Pasar Komoditas Pangan Strategis: Analisis Fluktuasi Harga Dan Produksi

This study was conducted in Garut Regency to evaluate the production and prices of strategic food commodities. The goal is to provide data to stakeholders to manage food needs. The research method used time series data analysis of agricultural production and prices collected from relevant agencies. The analysis results showed significant production fluctuations in several key commodities such as large red chili, cayenne pepper, and shallots. These fluctuations affect the prices of food commodities, especially cayenne pepper which experiences high fluctuations. The research also highlights the importance of price management to maintain regional economic stability. Changes in food commodity prices have an important impact, helping the government forecast inflation and serving as a selling price guideline for traders. However, delays in information on price fluctuations can make it difficult for the public and related parties to make decisions. Therefore, efforts are needed to provide better and more timely market information. With complete information, the government and market players can take appropriate steps to maintain economic stability and adequate food availability for the community. This shows the importance of analyzing data on food commodity price changes in decision-making and policy planning at the national level.

The Sussex COVID-19 Modelling Cell: the methods and successes of a collaboration between public health teams in local authorities, NHS hospital trusts, NHS commissioners, and universities

BackgroundThe Sussex Modelling Cell (SMC) is a consortium, formed during the COVID-19 pandemic, of representatives from NHS Sussex, and the local authorities and universities in Sussex. The SMC aimed to provide public health teams with local-data-driven modelling, data analysis, and policy and commissioning advice to mitigate the impact of the pandemic on the local population. It also aimed to answer operational questions, since the Government's forecasts were not suitably applicable. MethodsFrom March 23, 2020, the SMC met (virtually) every Thursday to monitor COVID-19 situation reports, answer queries related to data and modelling, and provide interpretations of data or reports from many internal and external sources. SMC also provided quantitative information for public health teams to use within their organisations to advise on the local epidemic picture. Among other tools, the SMC calibrated a mathematical model to local COVID-19 data that could forecast health-care and hospital demand and COVID-19-related deaths. FindingsThroughout the pandemic, the SMC provided scientific and data-driven evidence on the necessity of body storage contracts, monetary support for urgent care, and operational adjustments surrounding health-care provisions. The scientific evidence was generated and used repeatedly in each organisation to make beneficial decisions in a time of crisis. Although chasing an ever-changing pandemic picture was challenging, our swift reaction to national policy and pandemic changes allowed us to support policymakers, reduce anxiety, and provide clarity on the next steps. Our collaboration is one among few across the country and thus should be not only celebrated but also replicated, with appropriate resources and funding. InterpretationBesides mitigating the direct impact of the COVID-19 situation in Sussex, we have established a scientific collaboration relationship, in contrast to a customer-consultant setting, allowing the group to incorporate both the technical and applied perspectives into the work. With a clear structure, ethos and methodology, the SMC is able to step into the gap between academia and public health modelling to consider different impactful questions of operational importance where underlying complicated models exist, such as waiting times or system demand and capacity, and provide data analytic upskilling to public health teams. FundingBrighton and Hove City Council, East and West Sussex County Council, and Sussex Health and Care Partnership.

Local Government Forecast Practices: Time Horizon and Budgetary Influence

Over the past thirty years, four surveys have analyzed local government forecast practices, with the most recent being over a decade old. This article builds on the prior surveys with a novel 2018 survey dataset from the Government Finance Officers Association to examine the factors related to the adoption of a particular forecast time horizon and the perceived influence of forecasts on the final adopted budget. Estimates of ordered logistic regressions with predictive margins indicate that certain budget processes and the length of time since a government adopted a new budget process are associated with forecast practices.

The influence of regulation, taxes and charges on the energy supply of buildings

Nowadays, there are many technologies to supply buildings with heat, cooling and electricity as well as technologies for energy storage. With regard to the energy transition, it is needed to switch the energy supply to renewable resources, to apply energy storage to balance the volatile resources available and to link the different energy sectors with each other. However, the current structure of taxes and levies does not lead to the application of corresponding energy systems. The motivation of this research work is on the one hand to investigate the influence of current regulation, taxes and charges on energy carriers on building energy systems. Furthermore, the aim is to show which regulatory approaches represent the most cost-effective solutions for energy supply that lead to carbon dioxide (CO2) neutrality and also to the use of energy storage systems. A mixed-integer linear programming is used to optimise the different supply components considering variable electricity tariffs. The perspective of the analysis is on the individual building. Since the use of district heating is not an individual economic decision and district heating plays a minor role apart from e.g. some northern European countries, it was not considered in the studies presented here. In the studies, technologies for the use and storage of renewable energy were considered that can be integrated into individual buildings and are subject to an individual economic decision. Technologies that cannot be integrated into buildings but are essential for the energy transition, such as wind energy, are integrated indirectly via the flexible electricity price determined by the merit order. Here, government forecasts and scenarios as well as various concepts for the taxation of energy sources had been considered. A new method for the estimation of investment costs between 2015 and 2050 is developed and applied. The paper shows how an optimal building energy supply would look like under changed legal framework conditions as well as different tax burdens and reliefs. The paper concludes with a series of inferences and recommendations for adapted regulation to achieve the goals of defossilisation of the building sector.

Новый кризис экономики Исландии

Iceland was affected by the 2008 financial crisis more than any other European state, as its financial sector virtually collapsed. In 2020 Reykjavik again faced the economic crisis triggered by the coronavirus pandemic, which, according to government forecasts, should have caused the largest decline in GDP and exports of goods and services for half a century. In this article, the author intends to explore the history of formation and the current state of the Icelandic economy, as well as the state policy on the development of its main export industries – fishing, aluminium production and tourism. The paper also provides an assessment of the nature of the new economic crisis impact on the country’s key industries and of the prospects for recovery and further growth of the economy after quarantine restrictions removed. The current crisis has less affected the Icelandic fishing and aluminium industry, which are quite stable and provide production volumes close to its maximum values, but has severely hit its tourism, as the industry has lost more than 2/3 of the export earnings. However, the decline in number of tourists began even before the pandemic and was due to the fact that Icelandic air companies lost about 53% of their maximum carrying capacity. Nevertheless, the crisis created preconditions for the early recovery of the Icelandic tourism industry: national currency got weaker, the unemployment grew, the cost of labor decreased, but, unlike during the 2008 crisis, the tourism infrastructure was actively developing. In conclusion, the author suggests that the crisis will push Iceland to look for new sources of economic growth, which could be based on developing energy and science intensive industries (e.g. data centers, crypto mining farms, bioengineering and biomedicine centers, etc.). Moreover, the growing US-China rivalry over influence on Iceland could contribute to the latter’s economic development, as historical analysis shows that Reykjavik is more than able to competently use the contradictions between states pursuing great-power politics in order to obtain certain economic benefits.

A New Measure of Fiscal Transparency

The disclosure of fiscal and economic forecasts represents an increasingly important pillar of government transparency. Yet, a measure of transparency in fiscal and economic forecasts is presently missing. This article exploits the institutional features of the European Union’s (EU) Stability and Growth Pact (SGP) to construct a longitudinal, cross-country measure of transparency in government forecasts and to investigate its characteristics and drivers. The analysis reveals that governments are selective vis-a-vis the kind of forecasts they disclose: fiscal and economic flows are forecasted more frequently than fiscal stocks and assumptions. In addition, governments are relatively more willing to disclose short-term as opposed to medium-term forecasts. Finally, transparency is largely a function of political dynamics. Strikingly – given that the sample includes EU countries – the evidence indicates that variation in the degree of democracy is an important determinant of transparency.

ІСТОРІЯ ДЕРЖАВНОГО УПРАВЛІННЯ ЯК ОБ’ЄКТ РОЗГЛЯДУ В ПЕРСПЕКТИВНОМУ ВИМІРІ

The article contains an analysis of theses about the Soviet regime from the writer Olexander Solzhenitsyn with commentary and modern reflection, as well as an analogy to the Ukrainian state realities. Examples of presenting the history of public administration by different writers and political scientists – Ivan Bilyk, Andriy Bushkov, Bernard Verber, Halyna Mohylnytcka, Pavlo Shtepa, Oleksandr Solzhenitsyn, Hryhoriy Chkhartyshvili, and others, who created large-scale historical works on the basis not only of the analyzed archives, but also, most importantly, of a new modern view. in a perspective plane are given – as a possibility of its new interpretation, using the logical dimension of consideration. Emphasis is placed on such features of governance as centralization, totalitarianism, militarism, dictatorship, etc., which were characteristic of the Russian Empire and the Soviet Union and characteristic of the modern Russian Federation. It is emphasized that these features should be taken into account as the greatest danger to the development of Ukrainian statehood. It is concluded that these negative aspects of the previous regime were relevant until the end of the twentieth century, because the Soviet rudiments were so connected due to objective and subjective factors with the former countries that were part of the totalitarian system. At the same time, even today, in the democratic regime of Ukraine, some of these features remain relevant, in particular due to the stereotypical thinking of ordinary post-Soviet citizens who either remain in «internal emigration» in modern Ukraine or are «neutral», which also poses a threat to statehood, does not show the real state of national identity. Therefore, any relatively real historical retrospective in such conditions is promising in terms of government forecasting and planning. Key words: public administration, Ukraine, Russia, totalitarianism, democracy, Olexander Solzhenitsyn.

Eyes of the Storm: How Citizen Scientists Contribute to Government Forecasting and Risk Communication

AbstractSince the 1970s, the National Weather Service has trained citizens to collect, confirm, verify, or supplement radar and other data to contribute to a weather-ready nation. This study examines citizens who volunteer as weather spotters through a case study of an award-winning network. We uncover what motivates citizens to become involved in government science projects. Through the lens of relationship management theory and the related network approach, the study provides some of the first evidence on the benefits and drawbacks of citizens serving as amateur scientists and risk communicators and how these citizen scientists sustain their relationships with government scientists.

The impact of pharmaceutical tendering on prices and market concentration in South Africa over a 14-year period

ObjectiveWe investigated the South African tendering system for medicines to (a) evaluate its impact on prices and market concentration over a 14-year period and (b) analyze the accuracy of government forecasts of drug demand. MethodsWe calculated Herfindahl-Hirschman indexes to measure market concentration levels based on all pharmaceutical tender contracts issued by the South African government between 2003 and 2016 (n = 8701). We estimated price indexes to track changes in medicine costs over this period. We compared prices set through tenders in the public health care system to the corresponding prices in the private system. We also analyzed government data on procurement in selected drug classes to assess the accuracy of demand forecasts. FindingsBetween 2003 and 2016, the prices of medicines in most tender categories in the public health care system dropped by an average of around 40% or more. The prices of medicines procured for the public system through tenders were almost always lower than those sold in the private system. Tenders generally remained moderately to highly competitive over time (i.e., Herfindahl-Hirschman indexes < 2500), although the number of different firms winning contracts decreased in many categories. There were large discrepancies between the drug need estimates by the government and the quantities it went on to procure, with estimates off by more than 50% in most drug classes (9/16 observations). ConclusionTendering may be an effective measure to lower drug costs. Because most tenders remained competitive over time, price decreases may be durable. South African government officials should monitor the availability and prices of medicines to ensure continued access to affordable medicines for patients, as it may be undermined by the decreasing number of firms winning contracts over time. Given the large discrepancy between forecasts and procurements, the government would benefit from improving the accuracy of its demand forecasts.

Gauging the uncertainty of the economic outlook using historical forecasting errors: The Federal Reserve’s approach

The Federal Open Market Committee (FOMC) of the U.S. Federal Reserve regularly publishes participants’ qualitative assessments of forecast uncertainty, expressed relative to that seen on average in the past. The benchmarks used for these historical comparisons are the average root mean squared forecast errors (RMSEs) made by various private and government forecasters over the past twenty years. This paper documents how these benchmarks are constructed and discusses some of their properties. We draw several conclusions. First, if past performance is a reasonable guide to future accuracy, considerable uncertainty surrounds macroeconomic projections. Second, different forecasters have similar accuracy. Third, estimates of uncertainty about future real activity and interest rates are now considerably greater than prior to the financial crisis; in contrast, estimates of inflation accuracy have changed little. Finally, fan charts, constructed under certain assumptions and viewed in conjunction with the FOMC’s qualitative assessments, provide a reasonable approximation to future uncertainty.

Regret-sensitive treatment decisions

The threshold approach to medical decision-making, in which treatment decisions are made based on whether the probability of sickness exceeds a predetermined threshold, was introduced by (Pauker and Kassirer, N Engl J Med 293:229-234, 1975) and (Pauker and Kassirer, N Engl J Med 302:1109-1116, 1980). This study generalizes the threshold approach using regret theory. Regret theory is one of the established alternatives to expected utility theory (EUT), and partly overcomes the descriptive limitations of EUT. Under regret theory, agents suffer disutility from regret or enjoy utility from rejoicing by comparing the chosen alternative with the forgone one. We examine the effect of regret and rejoicing on the threshold approach by setting the EU case as a benchmark, and show conditions under which regret and rejoicing monotonically change the threshold probability. The threshold probability is lowered by regret and rejoicing under the reasonable condition in the sense that the condition can explain observed choices that EU fails to describe. This suggests that agents opt to undergo medical treatment by the feeling of regret and rejoicing. This result might explain the social problems that occur in relation to the public provision of medical services in many OECD countries such as medical expenditure rising faster than government forecasts. The results also imply that regret sensitivity might cause inequality of benefits from public medical services. Finally, we offer a solution to this problem.

Rice farming systems in Southern Lao PDR: Interpreting farmers’ agricultural production decisions using Q methodology

The agricultural sector in Lao PDR is forecast to move from subsistence rice production to a more modernized and market-oriented sector with greater focus on commercialization of agricultural production. Intensification of agricultural production in the southern and central rice growing regions of Lao PDR is problematic as dryland farmers rely on rainfall and soils are poor, yet rural households have been experiencing rapid change in their farming and livelihood systems. This paper employs Q methodology techniques to explore 35 farmers' viewpoints when contemplating their production goals and potential to adopt technologies to improve productivity. Findings describe the two emerging viewpoints among farmers as ‘labour saving productivity maximization’ and ‘traditional labour productivity using improved techniques’. The two viewpoints describe the different issues currently guiding production decisions. While the Lao Government forecasts substantial increases in rice production in the southern plains, farmers will require specialized and tailored support, accounting for their envisaged livelihood and production goals, to allow the sector transformation that many stakeholders currently envisage.

4-3-3 水素・燃料電池の政府見通しがもたらす効果の産業連関分析

4-3-3 水素・燃料電池の政府見通しがもたらす効果の産業連関分析

An Open Systems Model of Local Government Forecasting

Local governments use single source forecasts to inform decision making, which can constrain their ability to prepare for and respond to financial uncertainty. This unique context may have increased the challenges faced by governments at the local level through economic downturns such as the Great Recession. Given this concern, which has yet to be addressed in the literature, this article develops an open systems model of local government forecast accuracy, which can be tested across any type of local government. This article tests the model with a panel of special purpose governments at the local level, specifically school districts in Pennsylvania, from 2003 through 2013. Estimation of the model with longitudinal analysis shows that government forecasters at the local level consider internal and external factors when forecasting own-source and intergovernmental revenue streams. In particular, a mix of institutional, financial, and political factors are associated with forecast accuracy. Forecasters at the local level also considered the role of economic shocks, as evidenced by decreased expectations for own-source revenue through the Great Recession. Collectively, these findings demonstrate that they consider a complex and multifaceted information set, which includes both internal and external determinant factors of forecast accuracy at the local level. These factors can prove critical to increasing forecast accuracy in context of the financial uncertainty experienced through the Great Recession.

Gauging the Uncertainty of the Economic Outlook Using Historical Forecasting Errors: The Federal Reserve's Approach

Since November 2007, the Federal Open Market Committee (FOMC) of the U.S. Federal Reserve has regularly published participants’ qualitative assessments of the uncertainty attending their individual forecasts of real activity and inflation, expressed relative to that seen on average in the past. The benchmarks used for these historical comparisons are the average root mean squared forecast errors (RMSEs) made by various private and government forecasters over the past twenty years. This paper documents how these benchmarks are constructed and discusses some of their properties. We draw several conclusions. First, if past performance is a reasonable guide to future accuracy, considerable uncertainty surrounds all macroeconomic projections, including those of FOMC participants. Second, different forecasters have similar accuracy. Third, estimates of uncertainty about future real activity and interest rates are now considerably greater than prior to the financial crisis; in contrast, estimates of inflation accuracy have changed little. Finally, fan charts-constructed as plus-or-minus one RMSE intervals about the median FOMC forecast, under the expectation that future projection errors will be unbiased and symmetrically distributed, and that the intervals cover about 70 percent of possible outcomes-provide a reasonable approximation to future uncertainty, especially when viewed in conjunction with the FOMC's qualitative assessments. That said, an assumption of symmetry about the interest rate outlook is problematic if the expected path of the federal funds rate is expected to remain low.

How biased are U.S. government forecasts of the federal debt?

Government debt and its forecasts attracted considerable attention during the recent financial crisis. The current paper analyzes potential biases in different U.S. government agencies’ one-year-ahead forecasts of U.S. gross federal debt over 1984–2012. Standard tests typically fail to detect biases in these forecasts. However, impulse indicator saturation (IIS) detects economically large and highly significant time-varying biases, particularly at turning points in the business cycle. These biases do not appear to be politically related. IIS defines a generic procedure for examining forecast properties; it explains why standard tests fail to detect bias; and it provides a mechanism for potentially improving forecasts.

Comparative Analysis of Techniques for Forecasting Tourists’ Arrival

Tourists’ get attracted towards India because of its diverse culture and geography. Apart from heritage and culture, the tourists from all over the world come here for various other purposes like medical, business, education and sports. The tourism industry of India is economically important and is growing rapidly. The tourism industry in India helps in the growth of other sectors like agriculture, small scale industries, self-employment, etc. This makes forecasting of tourists’ arrivals in India a prime focus of the government Forecasting is the process of making predictions of the future based on past and present data and analysis of trends. Tourism forecasting plays an important role in providing awareness and support for future development of the Indian tourism industry. In this paper, an attempt has been made to forecast tourists’ arrival using statistical time series modeling techniques with the help of secondary data.

How Biased Are U.S. Government Forecasts of the Federal Debt?

Government debt and forecasts thereof attracted considerable attention during the recent financial crisis. The current paper analyzes potential biases in different U.S. government agencies’ one-year-ahead forecasts of U.S. gross federal debt over 1984-2012. Standard tests typically fail to detect biases in these forecasts. However, impulse indicator saturation (IIS) detects economically large and highly significant time-varying biases, particularly at turning points in the business cycle. These biases do not appear to be politically related. IIS defines a generic procedure for examining forecast properties; it explains why standard tests fail to detect bias; and it provides a mechanism for potentially improving forecasts.

The russian еconomy in 2015–2017

В статье представлены основные итоги социально-экономического развития России в2015 году и за семь месяцев 2016 года. Дана аналитическая оценка изменений макроэкономических показателей на ближайшие три года. Основное внимание уделено проблемным вопросам развития реального сектора экономики, роста промышленного производства, стимулирования спроса на продукцию и услуги отраслей национальной экономики, инвестиционной активности, разработки и реализации федерального бюджета, состояния социальной сферы. Сопоставлена динамика показателей российской экономики с мировыми трендами. Намечены пути преодоления отставания в технологическом уровне производства, в том числе за счет привлечения частных и зарубежных инвестиций, а также повышения эффективности капитальных вложений и экспорта высокотехнологичной продукции как ключевых факторов обеспечения устойчивого экономического роста. Проанализированы причины падения объемов кредитования нефинансовых организаций и роста задолженности населения банкам по кредитам. Отмечены недостатки действующей системы управления социально-экономическим развитием и особенно бюджетирования и прогнозирования. Предложены меры по преодолению негативных явлений, препятствующих выходу из глубокого структурного кризиса, в котором находится реальный сектор экономики и социальная сфера. Дана оценка качества антикризисных мер по обеспечению стабильного развития экономики, государственных прогнозов и бюджетных проектировок. Проанализированы результаты воздействия зарубежных санкций и российских контрсанкций, а также влияния цен на энергоресурсы, курса национальной валюты, инфляционных ожиданий на социально-экономическое развитие. Определены важнейшие факторы, способствующие макроэкономическому развитию экономики. Большое внимание уделено проблемам разработки и реализации системы стратегического планирования.