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Do countries falsify economic data strategically? Some evidence that they do

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  • Tomasz Kamil Michalski

    (GREGH - Groupement de Recherche et d'Etudes en Gestion à HEC - HEC Paris - Ecole des Hautes Etudes Commerciales - CNRS - Centre National de la Recherche Scientifique)

  • Guillaume Stoltz

    (GREGH - Groupement de Recherche et d'Etudes en Gestion à HEC - HEC Paris - Ecole des Hautes Etudes Commerciales - CNRS - Centre National de la Recherche Scientifique)

Abstract

We find evidence supporting the hypothesis that countries at times misreport their economic data in a strategic manner. Among those suspected are countries with fixed exchange rate regimes, high negative net foreign asset positions or negative current account balances, which corroborates the intuition developed with a simple economic model. We also find that countries with bad institutional quality rankings and those in Africa, Middle East, Eastern Europe and Latin America release economic data of questionable veracity. Our evidence calls for models with public signals to consider strategic misinformation and for establishing independent statistical agencies to assure the delivery of high quality economic data.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Tomasz Kamil Michalski & Guillaume Stoltz, 2010. "Do countries falsify economic data strategically? Some evidence that they do," Post-Print hal-00543492, HAL.
  • Handle: RePEc:hal:journl:hal-00543492
    Note: View the original document on HAL open archive server: https://hal-hec.archives-ouvertes.fr/hal-00543492
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    References listed on IDEAS

    as
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    5. Tomasz Kamil Michalski & Guillaume Stoltz, 2010. "Do countries falsify economic data strategically? Some evidence that they do," Post-Print hal-00543490, HAL.
    6. Carmen M. Reinhart & Kenneth S. Rogoff, 2009. "Varieties of Crises and Their Dates," Introductory Chapters, in: This Time Is Different: Eight Centuries of Financial Folly, Princeton University Press.
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    Citations

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    Cited by:

    1. Andrew C. Chang & Phillip Li, 2018. "Measurement Error In Macroeconomic Data And Economics Research: Data Revisions, Gross Domestic Product, And Gross Domestic Income," Economic Inquiry, Western Economic Association International, vol. 56(3), pages 1846-1869, July.
    2. Huang, Yasheng & Niu, Zhiyong & Yang, Clair, 2020. "Testing firm-level data quality in China against Benford’s Law," Economics Letters, Elsevier, vol. 192(C).
    3. McDonald, Bruce D. III & Goodman, Christopher B, 2020. "The Truth about Honesty in the Nonprofit Sector," SocArXiv 48g5c, Center for Open Science.
    4. Tomasz Kamil Michalski & Guillaume Stoltz, 2010. "Do countries falsify economic date strategically? Some evidence that they do," Working Papers hal-00540794, HAL.
    5. Koch, Christoffer & Okamura, Ken, 2020. "Benford’s Law and COVID-19 reporting," Economics Letters, Elsevier, vol. 196(C).
    6. Tomasz Michalski & Gilles Stoltz, 2013. "Do Countries Falsify Economic Data Strategically? Some Evidence That They Might," The Review of Economics and Statistics, MIT Press, vol. 95(2), pages 591-616, May.
    7. Yi Chen & Ziying Fan & Xiaomin Gu & Li-An Zhou, 2020. "Arrival of Young Talent: The Send-Down Movement and Rural Education in China," American Economic Review, American Economic Association, vol. 110(11), pages 3393-3430, November.
    8. Vadim S. Balashov & Yuxing Yan & Xiaodi Zhu, 2020. "Who Manipulates Data During Pandemics? Evidence from Newcomb-Benford Law," Papers 2007.14841, arXiv.org, revised Jan 2021.
    9. Zhang, Ping & Shi, XunPeng & Sun, YongPing & Cui, Jingbo & Shao, Shuai, 2019. "Have China's provinces achieved their targets of energy intensity reduction? Reassessment based on nighttime lighting data," Energy Policy, Elsevier, vol. 128(C), pages 276-283.
    10. Dang, Canh Thien & Owens, Trudy, 2020. "Does transparency come at the cost of charitable services? Evidence from investigating British charities," Journal of Economic Behavior & Organization, Elsevier, vol. 172(C), pages 314-343.
    11. Ausloos, Marcel & Cerqueti, Roy & Mir, Tariq A., 2017. "Data science for assessing possible tax income manipulation: The case of Italy," Chaos, Solitons & Fractals, Elsevier, vol. 104(C), pages 238-256.
    12. Riccioni, Jessica & Cerqueti, Roy, 2018. "Regular paths in financial markets: Investigating the Benford's law," Chaos, Solitons & Fractals, Elsevier, vol. 107(C), pages 186-194.
    13. MM. Andranik Muradyan, 2020. "Procedure for Assessing the Investment Attractivenessof Foreign Markets.Comparative Analysis of Former USSR Countries," Journal of Marketing and Consumer Behaviour in Emerging Markets, University of Warsaw, Faculty of Management, vol. 1(10), pages 24-48.
    14. Abhiroop Mukherjee & George Panayotov & Janghoon Shon, 2019. "Eye in the sky: private satellites and government macro data," HKUST IEMS Working Paper Series 2019-68, HKUST Institute for Emerging Market Studies, revised Oct 2019.

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    More about this item

    Keywords

    countries; falsify; economic; data; strategically; evidence;
    All these keywords.

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems

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