Do fiscal variables affect fiscal expectations? Experiments with real world and lab data
We generate observable expectations about fiscal variables through laboratory experiments using real world data from several European countries as stimuli. We compare a VAR model of expectations for data that is presented in a fiscal frame with one for neutrally presented data. We test the validity of the setup and find that participants understand the meaning of the fiscal variables, but also that their ability to perceive the correct characteristics of fiscal policy is limited. Expectations are consistent neither with rational nor with purely adaptive expectations, but instead follow an augmented-adaptive scheme.
Year of publication: |
2009
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Authors: | Bernasconi, Michele ; Kirchkamp, Oliver ; Paruolo, Paolo |
Published in: |
Journal of Economic Behavior & Organization. - Elsevier, ISSN 0167-2681. - Vol. 70.2009, 1-2, p. 253-265
|
Publisher: |
Elsevier |
Keywords: | Experiments Fiscal policy Expectations Panel data |
Saved in:
Online Resource
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