Hawks to Doves? News and views on public finances in a survey experiment

The Institute of Economics will hold a seminar meeting as part of its Seminar Series on Tuesday, May 14, 2024: Sebastian Gechert from Chemnitz University of Technology will present the paper “Hawks to Doves? News and views on public finances in a survey experiment".

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. Higher education and financial literacy come with substantially lower estimation errors, better knowledge about the debt brake plus a more lenient view on it. 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 estimates. 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.

The Seminar will be held in Aula 3.