News and Views on Public Finances: A Survey Experiment

49 Pages Posted: 23 Jan 2024

See all articles by Jan Behringer

Jan Behringer

Hans-Boeckler-Stiftung - Macroeconomic Policy Institute (IMK)

Lena Dräger

Leibniz University Hannover

Sebastian Dullien

Hans-Boeckler-Stiftung - Macroeconomic Policy Institute (IMK)

Sebastian Gechert

Chemnitz University of Technology (CUT)

Date Written: 2024

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 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.

Keywords: public debt, fiscal rules, information treatment, expectations

JEL Classification: E600, D830, H310, H600

Suggested Citation

Behringer, Jan and Dräger, Lena and Dullien, Sebastian and Gechert, Sebastian, News and Views on Public Finances: A Survey Experiment (2024). CESifo Working Paper No. 10891, Available at SSRN: https://ssrn.com/abstract=4703295 or http://dx.doi.org/10.2139/ssrn.4703295

Jan Behringer (Contact Author)

Hans-Boeckler-Stiftung - Macroeconomic Policy Institute (IMK) ( email )

Hans-Böckler-Straße 39
40476 Düsseldorf
Germany

Lena Dräger

Leibniz University Hannover ( email )

Königsworther Platz 1
Hannover, 30167
Germany

Sebastian Dullien

Hans-Boeckler-Stiftung - Macroeconomic Policy Institute (IMK) ( email )

Hans-Böckler-Straße 39
40476 Düsseldorf
Germany

Sebastian Gechert

Chemnitz University of Technology (CUT) ( email )

Chemnitz
Germany

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