مقاله سال ۲۰۱۶

۱٫ Introduction

Recent studies on budget forecasting have attracted considerable attention (e.g., Chatagny & Soguel, 2012; Frankel, 2011) because many countries, both advanced and developing, face large outstanding debts. In particular, several European Union (EU) member states have an urgent need to resolve serious sovereign debt issues. Tackling these problems is crucial not only for the country facing the debt, but also for the rest of the EU member states, so as to ensure the stability of the currency union.

Japan’s debt-to-GDP ratio is a serious concern for the country, being the highest among the advanced economies. Although Japan is not a member of any currency union, the Japanese sovereign debt crisis could have a much greater impact than the recent crises in Greece and other peripheral countries. Currently, Japan is facing large government deficits, and its public debt is growing rapidly. In the fiscal year 2011, the deficit was −۸٫۹% of the GDP, and thedebt-to-GDP ratio was 210.6%.1 The corresponding figures for Germany, which is one of the handful of countries that have maintained sustainable levels, were −۰٫۸% and 86.3%, respectively. Many observers worry that Japan’s debt-toGDP ratio is unsustainable; thus, a considerable amount of effort has been devoted to the examination of Japan’s fiscal issues. These efforts have focused mainly on fiscal sustainability (Broda & Weinstein, 2005; Hubbard & Ito, 2006), increases in the fiscal deficit, and the accumulation of government debt (Asako, Ito, & Sakamoto, 1991; Doi & Ihori, 2002; Ihori, 2006; Ihori, Doi, & Kondo, 2001; Ihori, Nakazato, & Kawade, 2003).

Fig. 1 illustrates Japan’s debt-to-GDP ratio and the Japanese government’s forecast errors (actual value — forecast value) for real and nominal GDP growth,respectively. It provides a rough picture of the relationship between periods with large negative forecast errors and those with large increases in the debt-to-GDP ratio.2 For certain periods between 1990 and early 2000, large negative forecast errors are associated with rapid increases in the debt-to-GDP ratio. This suggests that the overprediction of output growth might result in an increase in the debt-to-GDP ratio. In contrast, there are periods between the mid-1980s and 1990 that show positive forecast errors being associated with stagnant or decreasing debtto-GDP ratios. This underscores the significance of the government’s behavior in making output forecasts. Note that there is a large difference in forecast errors (for the 15-month forecast, F2, seen in Fig. 1) between real and nominal GDP growth in 2003; the forecast error for real GDP growth is a large positive value, while that for nominal GDP growth is around zero. This suggests that there may be a closer relationship between the debt-to-GDP ratio and nominal GDP, because underprediction did not lead to a decrease in the former.