Do fiscal variables affect fiscal expectations? Experiments with real world and lab data
Michele Bernasconi and Oliver Kirchkamp and Paolo Paruolo
Abstract:
We generate observable expectations about fiscal variables through laboratory experiments using real world data from several European countries as stimuli. We compare a VAR model of expectations for data which is presented in a fiscal frame with one for neutrally presented data. We measure the degree to which participants use fiscal data for their forecasts. Agents' expectations are found neither to be consistent with rational nor with purely adaptive expectations but, instead, follow an augmented-adaptive scheme. Methodological implications of the present approach for experiments in macroeconomics are also discussed.JEL-Classification: C91, D89, E62, H31
Keywords: Fiscal expectations, experiments, Antikeynesian
- You can download the SFB working paper as a PDF file.
- Meanwhile, there is a more recent version of the paper (as of 7 February 2008).
- The paper has been published at Journal of Economic Behavior and Organisation, Vol. 70(1-2), May 2009, pp. 253-265.
- Here are the instructions and the data for the experiment.
- In case you are interested, here is a list of the individual payoffs (anonymised, in random order). Participants were paid in DM. There was no specific experimental currency. There was no show-up fee.