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Beliefs about public debt and the demand for government spending?
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Roth, Christopher, Settele, Sonja and Wohlfart, Johannes (2022) Beliefs about public debt and the demand for government spending? Journal of Econometrics, 231 (1). pp. 165-187. doi:10.1016/j.jeconom.2020.09.011 ISSN 0304-4076.
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Official URL: https://doi.org/10.1016/j.jeconom.2020.09.011
Abstract
We examine how beliefs about the debt-to-GDP ratio affect people’s attitudes towards government spending and taxation. Using representative samples of the US population, we run a series of experiments in which we provide half of our respondents with information about the debt-to-GDP ratio in the US. Based on a total of more than 4,000 respondents, we find that most people underestimate the debt-to-GDP ratio and reduce their support for government spending once they learn about the actual amount of debt, but do not substantially alter their attitudes towards taxation. The treatment effects seem to operate through changes in expectations about fiscal sustainability and persist in a four-week follow-up.
Item Type: | Journal Article | ||||||||
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Subjects: | H Social Sciences > HC Economic History and Conditions H Social Sciences > HJ Public Finance |
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Divisions: | Faculty of Social Sciences > Economics | ||||||||
Library of Congress Subject Headings (LCSH): | Debts, Public, Expenditures, Public, Gross domestic product | ||||||||
Journal or Publication Title: | Journal of Econometrics | ||||||||
Publisher: | Elsevier BV | ||||||||
ISSN: | 0304-4076 | ||||||||
Official Date: | November 2022 | ||||||||
Dates: |
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Volume: | 231 | ||||||||
Number: | 1 | ||||||||
Page Range: | pp. 165-187 | ||||||||
DOI: | 10.1016/j.jeconom.2020.09.011 | ||||||||
Status: | Peer Reviewed | ||||||||
Publication Status: | Published | ||||||||
Access rights to Published version: | Restricted or Subscription Access | ||||||||
Date of first compliant deposit: | 30 September 2020 | ||||||||
Date of first compliant Open Access: | 3 March 2023 | ||||||||
RIOXX Funder/Project Grant: |
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