Seemingly Irrelevant Events Affect Economic Perceptions and Expectations: The FIFA World Cup 2006 as a Natural Experiment
16 Pages Posted: 8 Sep 2006
Date Written: August 2006
Prominent economic theories have emphasized the role of commonly held perceptions and expectations for determining macroeconomic outcomes. A key empirical question is how such collectively held beliefs are formed. We use the FIFA World Cup 2006 as a natural experiment. We provide direct evidence that seemingly irrelevant events (the outcomes of soccer matches) can systematically affect individual perceptions about economic prospects, both on a personal and economy-wide level.
Keywords: expectation formation, sunspots, soccer world cup, macroeconomic outcomes
JEL Classification: D8, D0, E0
Suggested Citation: Suggested Citation