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News and Views on Public Finances: A Survey Experiment

Author

Listed:
  • Jan Behringer

    (Macroeconomic Policy Institute (IMK))

  • Lena Draeger

    (Leibniz University Hannover (LUH))

  • Sebastian Dullien

    (Macroeconomic Policy Institute (IMK))

  • Sebastian Gechert

    (Chemnitz University of Technology (TUC))

Abstract

We use novel German survey data to investigate how perceptions and information about public finances influence attitudes towards public debt and fiscal rules. On average, people strongly underestimate the debt-to-GDP ratio, overestimate the interest-to-tax-revenue ratio and favor a tighter German debt brake. In an information treatment experiment, people consider public debt to be a more (less) severe problem once they learn the actual debt-to-GDP or interest-to-tax-revenue ratio is higher (lower) than their estimate. However, the treatment effects partly vanish when anchoring respondents' beliefs with historical public debt figures. We find no treatment effects on attitudes towards the debt brake.

Suggested Citation

  • Jan Behringer & Lena Draeger & Sebastian Dullien & Sebastian Gechert, 2024. "News and Views on Public Finances: A Survey Experiment," IMK Working Paper 223-2024, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
    • Handle: RePEc:imk:wpaper:223-2024
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    References listed on IDEAS

    as
    1. Francesco Grigoli & Damiano Sandri, 2023. "Public debt and household inflation expectations," BIS Working Papers 1082, Bank for International Settlements.
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    More about this item

    Keywords

    public debt; fiscal rules; information treatment; expectations;
    All these keywords.

    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • H60 - Public Economics - - National Budget, Deficit, and Debt - - - General

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