Beliefs about public debt and the demand for government spending

Publikation: Bidrag til tidsskriftTidsskriftartikelForskningfagfællebedømt

We examine how beliefs about the debt-to-GDP ratio affect people's attitudes towards government spending and taxation. Using representative samples of the US population, we run a series of experiments in which we provide half of our respondents with information about the debt-to-GDP ratio in the US. Based on a total of more than 4,000 respondents, we find that most people underestimate the debt-to-GDP ratio and reduce their support for government spending once they learn about the actual amount of debt, but do not substantially alter their attitudes towards taxation. The treatment effects seem to operate through changes in expectations about fiscal sustainability and persist in a four-week follow-up.

OriginalsprogEngelsk
Artikelnummer1
TidsskriftJournal of Econometrics
Vol/bind231
Udgave nummer1
Sider (fra-til)165-187
ISSN0304-4076
DOI
StatusUdgivet - 1 nov. 2022

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