Do Countries Falsify Economic Data Strategically? Some Evidence that They Do
The Review of Economics and Statistics, Forthcoming
60 Pages Posted: 9 Mar 2013
Date Written: April 27, 2010
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.
Keywords: capital flows, public information provision, misinformation, Benford's law, transparency
JEL Classification: F31, F32, F33, F34, D82
Suggested Citation: Suggested Citation