News Shocks in the Data: Olympic Games and Their Macroeconomic Effects - Reply

Hamburg Contemporary Economic Discussions No. 52, 2015

15 Pages Posted: 25 May 2017

See all articles by Viktoria Langer

Viktoria Langer

Independent

Wolfgang Maennig

Universität Hamburg, Faculty of Business, Economics and Social Sciences

Felix Richter

University of Hamburg - School of Business, Economics and Social Sciences

Date Written: June 2015

Abstract

Recent analyses relate increases in the growth rate of countries to anticipation effects caused by bidding for the Olympic Games, so called news shocks. We argue that these findings should be interpreted cautiously. First, these analyses may suffer from an omitted variable bias because they neglect key determinants of economic growth. Second, these analyses compare the bidders for the Olympic Games to all other countries in the world, which constitutes a comparison between groups that show large differences in their structural characteristics. We show that including established determinants of economic growth and comparing the bidders to a suitable control group may lead to a complete disappearance of the anticipated economic effects of Olympic Games.

Keywords: Anticipated shock, Olympic Games, GDP growth, matching, mega event

JEL Classification: E62, E65, F1, L83

Suggested Citation

Langer, Viktoria and Maennig, Wolfgang and Richter, Felix, News Shocks in the Data: Olympic Games and Their Macroeconomic Effects - Reply (June 2015). Hamburg Contemporary Economic Discussions No. 52, 2015, Available at SSRN: https://ssrn.com/abstract=2973287 or http://dx.doi.org/10.2139/ssrn.2973287

Viktoria Langer

Independent ( email )

Wolfgang Maennig (Contact Author)

Universität Hamburg, Faculty of Business, Economics and Social Sciences ( email )

Von-Melle-Park 5
Hamburg, 20146
Germany

Felix Richter

University of Hamburg - School of Business, Economics and Social Sciences ( email )

Von-Melle-Park 5
Hamburg, D-20146
Germany

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