The suspension of belief is commonly needed for science fiction. Most space dramas require alien races to speak English or the existence of some form of instantaneous universal translator. It now seems that something similar is required when moving in fiscal space. Fiscal space is the money available for new measures while achieving minimum compliance with the rules. Lots of words are being used to describe this but can we tell what they actually mean?
Author: Seamus Coffey
Producing Short-Term Forecasts of the Irish Economy: A Suite of Models Approach.
A new working paper from Niall Conroy and Eddie Casey of the Fiscal Council Secretariat.
Abstract:
The Council’s mandate includes endorsing, as it considers appropriate, the official macroeconomic forecasts of the Department of Finance on which the annual Budget and Stability Programme Update are based. As part of the endorsement process and for the purposes of its ongoing monitoring and analysis of the Irish economy, the Council’s Secretariat produces its own Benchmark macroeconomic projections. This paper describes the short-run forecasting models used by the Secretariat for producing these projections. The general forecasting approach can be described as follows. Equations are used to forecast each component of the expenditure side of the Quarterly National Accounts. Multiple models are estimated for most components, with the simple model average used as an initial input into the formulation of the Benchmark projections. The out-of-sample forecasting performance of these models is assessed at each endorsement round. In addition to these model-based projections, other elements are considered. Discussions with the Council and other forecasting agencies help to guide any judgement that may be applied before arriving at the final Benchmark projections.
Employment Opportunity: Fiscal Council
The Fiscal Council are seeking to recruit a Research Assistant. The position is on an initial two-year basis with full details available here. The closing date for applications is Friday 21st April. The start date is negotiable, particularly for candidates completing studies.
The Apple Appeals
We now have summaries of the appeals to be made by Ireland (published in December) and Apple (published yesterday) in the state-aid case. Ireland set forward 9 grounds while Apple include 14.
On the facts of the case Ireland argue:
The decision also mischaracterizes the activities and responsibilities of the Irish branches of ASI and AOE. These branches carried out routine functions, but all important decisions within ASI and AOE were made in the USA, and the profits deriving from these decisions were not properly attributable to the Irish branches of ASI and AOE.
With Apple’s position being:
The Commission made fundamental errors by failing to recognise that the applicants’ profit-driving activities, in particular the development and commercialisation of intellectual property (‘Apple IP’), were controlled and managed in the United States. The profits from those activities were attributable to the United States, not Ireland.
The readers can identify the difference. The case continues to attract significant attention and there were two recent opinion pieces in The Irish Times from Liza Lovdahl-Gormsen and Paul Sweeney on the topic.
Finally, here is a piece worth reading from Martin O’Malloney in the Dublin Review of Books.
GNI*
The report of the Economic Statistics Review Group, and response of the CSO, are available here. There is lots of detail in both that goes beyond the publication of a modified aggregate measure, GNI*.
Job Opportunity with the Fiscal Council
The Fiscal Advisory Council are currently looking to fill an economist role. The position is at AP level and the closing date for applications is Thursday 9th of February. Full details of the post are available here.
Fiscal Assessment Report
The latest Assessment Report of the Fiscal Council is available here.