Independent fiscal institution and macro-fiscal Forecasts: The case of the Haut Conseil des Finances Publiques in France, Théo Metz, Journal of Economics and Statistics, 2026, Forthcoming
Abstract: For more than two decades, France has produced macro-fiscal forecasts that have tended to be overly optimistic, despite the fiscal discipline framework imposed by the European Union. This study draws on data from the Stability Programmes between 1998 and 2024 to trace the evolution of macroeconomic and fiscal forecast errors and to assess whether the creation of the French High Council of Public Finance (Haut Conseil des finances publiques, HCFP) in 2013 is associated with improved forecast accuracy. Descriptively, forecast errors, particularly those related to growth, debt, and expenditure, declined markedly after 2013, both in magnitude and direction. An interrupted time-series (ITS) analysis identifies a robust structural break in public expenditure forecast errors around 2013, while growth, revenue, deficit, and debt series do not exhibit statistically significant breaks. To address the concern that the observed improvement could simply reflect France becoming easier to forecast, we complement the ITS with a within-France difference-in-differences (DiD) comparing the French government’s Stability Programme errors to forecasts produced by the IMF and the European Commission for the same target years, using target-year fixed effects to absorb common shocks. The ITS, the forecaster DiD, non-parametric Wilcoxon rank-sum tests, and a permutation-based ITS with randomly assigned break dates converge on a robust improvement for expenditure (of about 0.5 pp), moderate evidence for debt, and no HCFP-specific effect for GDP, revenue, or the fiscal balance. The paper concludes that, despite its merely advisory mandate, the HCFP plausibly contributes to fiscal transparency on the expenditure side, though the magnitude of its disciplining effect remains modest and heterogeneous across fiscal aggregates.
Fiscal multipliers, public debt anchor and government credibility in a behavioural macroeconomic model, Amélie Barbier-Gauchard, Thierry Betti, Théo Metz, European Journal of Political Economy, 2023, 102457, ISSN 0176-2680, https://doi.org/10.1016/j.ejpoleco.2023.102457, HCERS rank A, CNRS rank 2.
Abstract: We develop a behavioural macroeconomic model to investigate the question of fiscal policy credibility and how agents’ expectations about the output gap, public debt, expenditure and taxation affect the fiscal multiplier and debt stability. To do this, we model heterogeneous expectation-formation processes in a market populated by fundamentalists and chartists, agents being able to switch from one rule to another depending on the effective outcome in each period. This model produces waves of optimism and pessimism along the business cycle. We show in this article that when agents are optimistic about the future output gap and public debt, the fiscal multiplier tends to be larger whatever the nature of the fiscal shock. It also appears that fiscal expansion has less of a negative effect on public debt. Furthermore, agents’ expectations about public debt and the fiscal credibility of the government affect indicators of government performance (the fiscal multiplier and public debt stability).
Presentation: 8th European Workshop on Political Macroeconomics (Sofia, June 2024), 6th Doctoral workshop on Quantitative Dynamic Economics (Strasbourg, October 2023), Workshop on Scarring, hysteresis, and investment in Europe College of Europe (Bruges, November 2022), 1st International Workshop on Economic Growth and Macroeconomic Dynamics (Online/Rome, September 2022), Tinbergen Institute Summer School on Behavioural Macro and Complexity (Online, August 2022), 10th UECE Conference on Economic and Financial Adjustment (Lisbon, July 2022), 19th Augustin Cournot Doctoral Days (poster session Strasbourg, May 2022), ERMEES seminar (Strasbourg, April 2022)
Does oversigth pay off? Independent fiscal institutions and forecast accuracy, co-authored with Carolina Ulloa-Suarez and Oscar Valencia, BETA Working Paper, 2026-14, 2026
Available here: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=6842838
Abstract: This paper examines the causal effect of Independent Fiscal Institutions (IFIs) on the accuracy of government macroeconomic and fiscal forecasts. Using a novel dataset of real-time budget projections for 55 European and Latin American countries over 1998–2019, we exploit the staggered introduction of IFIs to identify their impact on forecast performance. We find that IFI implementation leads to statistically and economically meaningful reductions in forecast errors for GDP growth, total government revenue, and total government expenditure. Improvements in GDP growth forecasts emerge within two years of implementation, whereas gains in fiscal forecast accuracy materialise more gradually, after four to five years. This dynamic pattern is consistent with reputational and accountability mechanisms, whereby sustained independent scrutiny reshapes governments’ forecasting incentives over time. The results are robust across alternative identification strategies and forecast accuracy measures. Overall, the findings underscore the role of IFIs as institutions that strengthen fiscal credibility by reshaping forecasting incentives over time, thereby complementing fiscal rules and supporting more sustainable fiscal policymaking.
New Fiscal Transparency Index and Public Debt Borrowing Costs, Théo Metz, BETA Working Paper, 2024-50, 2024
Available here: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=5027741
Abstract: This study examines the determinants of public debt borrowing costs, focusing particularly on the impact of scal transparency on sovereign bond rates. To assess this relationship, we construct a new Fiscal Transparency Index (FTI) inspired by the concepts of monetary transparency, incorporating the roles of all budgetary entities including independent scal institutions (IFIs), the government, the legislature, and the supreme audit institutions (SAI). This index encompasses dimensions of political, economic, procedural, policy, and operational transparency. Our analysis spans 27 developed and developing countries from 2006 to 2023. Findings indicate enhanced fiscal transparency correlates with reduced sovereign bond rates, especially regarding developing economies' long-term interest rates. Results are also robust to several controls, alternative measures, and modelisations.
Presentation: 12th UECE Conference on Economic and Financial Adjusment (Lisbon, July 2024), 40th GdRE (Orléans, July 2024), 23rd LAGV (Marseille, June 2024), 6th International Conference on European Economics and Politics (Zürich, June 2024), 72th AFSE (Bordeaux, June 2024), Journée des doctorants du BETA (Nancy, May 2024), 10e Journée Doctorale d’Analyse des Politiques Publiques (Le Havre, March 2024), ERMEES seminar Strasbourg (December, 2023)
METZ Théo, Bulletin de l’Observatoire des politiques économiques en Europe, Observatoire des Politiques Economiques en Europe (OPEE), vol. 50, 31 - 43.
Available here: https://opee.unistra.fr/Cibles-et-previsions-budgetaires-Le-role-du-Haut-Conseil-des-finances-publiques
Abstract: Depuis plus de vingt ans, la France affiche des prévisions budgétaires souvent trop optimistes, en dépit du cadre de discipline budgétaire imposé par l’Union européenne. Cette étude s’appuie sur les données des programmes de stabilité entre 1998 et 2023 pour retracer l’évolution des écarts de prévision macroéconomiques et budgétaires, et pour évaluer l’effet de la création du Haut Conseil des finances publiques (HCFP) en 2013. Les résultats montrent qu’après l’instauration du HCFP, les erreurs de prévision, notamment celles liées à la croissance, à la dette et aux recettes, ont nettement diminué, tant en termes d’ampleur que de signe. L’analyse statistique en séries temporelles interrompues met en évidence un impact significatif du HCFP sur la précision des prévisions de dépenses publiques, mais un effet plus limité sur les prévisions de croissance et de recettes. Ces résultats suggèrent que le HCFP, bien qu’il n’ait qu’un pouvoir consultatif, joue un rôle réel en renforçant la transparence budgétaire et la crédibilité des engagements de l’État.
Institutions budgétaires indépendantes dans l’UE : présentations et perspectives futures METZ Théo, Bulletin de l’Observatoire des politiques économiques en Europe, Observatoire des Politiques Economiques en Europe (OPEE), 2022, vol. 46(1), pages 77-88, September
Available here: http://opee.unistra.fr/IMG/pdf/bulletinopee_46_final_article9.pdf
Abstract: Le 5 septembre 2022, le FMI a proposé une nouvelle réforme du cadre budgétaire de l’Union européenne en accordant plus de pouvoir aux institutions et aux règles budgétaires. Dans celle-ci, les institutions budgétaires indépendantes nationales ont un rôle accru dans le contrôle et l’évaluation des plans budgétaires nationaux menés par les gouver- nements. Cette note revient dans un premier temps sur la création de ces institutions budgétaires indépendantes au sein de l’Union européenne, et porte ensuite un regard sur le potentiel rôle que ces institutions peuvent jouer dans le futur en s’appuyant sur une comparaison avec les banques centrales indépendantes.
Fiscal multipliers, public debt anchor and government credibility in a behavioural macroeconomic model, Amélie Barbier-Gauchard, Thierry Betti, Théo Metz, INFER Brief Series N°2, 2024, [link]
Do the opinions of the French High Council of Public Finances move the French sovereign yield curve? An event-study analysis of HCFP avis releases, METZ Théo, Ongoing work, New draft avalaible soon