Sources of macroeconomic forecast errors and their impacts on tax revenue estimates

2017 Fiscal Year Final Research Report

• Project/Area Number: 16K17119
• Research Category: Grant-in-Aid for Young Scientists (B)
• Allocation Type: Multi-year Fund
• Research Field: Economic policy
• Research Institution: Tokyo University of Science
• Principal Investigator: Tsuchiya Yoichi 東京理科大学, 経営学部ビジネスエコノミクス学科, 准教授 (70711620)
• Project Period (FY): 2016-04-01 – 2018-03-31
• Keywords: 経済予測 / 政府予測 / 景気循環 / 税収

Outline of Final Research Achievements

This study constructs dataset including tax revenue estimates and macroeconomic forecasts by the Japanese government during the period between 1995 and 2016. It shows that those forecast errors are not associated with business cycles or the state of the economy. However, it shows that there are various biases in those estimates and forecasts. Income tax revenue exhibits optimistic biases while corporate tax revenue exhibits prudent biases. Consumption tax revenue does not seem to be biased. Looking at changes in those errors over time, those biases reduces recently, and thus it indicates that the Japanese government is likely to improve its estimates and forecasts.

Free Research Field

経済予測、マクロ経済学