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Do fiscal variables affect fiscal expectations? Experiments with real world and lab data

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Author Info
Bernasconi, Michele () (Università dell'Insubria)
Kirchkamp, Oliver () (Sonderforschungsbereich 504)
Paruolo, Paolo () (University of Insubria)

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Abstract

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 which is presented in a fiscal frame with one for neutrally presented data. We measure the degree to which participants use fiscal data for their forecasts. Agents' expectations are found neither to be consistent with rational nor with purely adaptive expectations but, instead, follow an augmented-adaptive scheme. Methodological implications of the present approach for experiments in macroeconomics are also discussed.

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Publisher Info
Paper provided by Sonderforschungsbereich 504, Universität Mannheim & Sonderforschungsbereich 504, University of Mannheim in its series Sonderforschungsbereich 504 Publications with number 04-27.

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Length: 49 pages
Date of creation: 26 Jul 2004
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Handle: RePEc:xrs:sfbmaa:04-27

Note: Financial support from the Deutsche Forschungsgemeinschaft, SFB 504, at the University of Mannheim, and partial financial support from Italian MIUR grants ex 60% is gratefully acknowledged.
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Related research
Keywords: Experiments; fiscal policy; expectations; causality; cointegration; panel data;

Other versions of this item:

Find related papers by JEL classification:
C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
D89 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Other
E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household

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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Fiore, Annamaria, 2009. "Experimental Economics: Some Methodological Notes," MPRA Paper 12498, University Library of Munich, Germany. [Downloadable!]
  2. Michael W.M. Roos & Wolfgang J. Luhan, 2008. "As if or What? – Expectations and Optimization in a Simple Macroeconomic Environment," Ruhr Economic Papers 0055, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen. [Downloadable!]
  3. Oliver Kirchkamp & Michele Bernasconi & Paolo Paruolo, 2006. "Do fiscal variables affect fiscal expectations? Experiments with real world and lab data," CRIEFF Discussion Papers 0608, Centre for Research into Industry, Enterprise, Finance and the Firm. [Downloadable!]
    Other versions:
  4. Michael W.M. Roos & Wolfgang J. Luhan, 2008. "Are Expectations Formed by the Anchoring-and-adjustment Heuristic? – An Experimental Investigation," Ruhr Economic Papers 0054, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen. [Downloadable!]
  5. John Duffy, 2008. "Macroeconomics: A Survey of Laboratory Research," Working Papers 334, University of Pittsburgh, Department of Economics, revised Mar 2008. [Downloadable!]
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