Beliefs About Public Debt and the Demand for Government Spending

Christopher Roth, Sonja Settele () and Johannes Wohlfahrt ()
Additional contact information
Sonja Settele: Center for Economic Behavior and Inequality (CEBI) and Department of Economics, University of Copenhagen, Oster Farimagsgade 5, Building 35, 1353 Copenhagen K, Denmark
Johannes Wohlfahrt: Center for Economic Behavior and Inequality (CEBI) and Department of Economics, University of Copenhagen, Oster Farimagsgade 5, Building 35, 1353 Copenhagen K, Denmark; Danish Finance Insitute (DFI), Solbjerg Plads 3, A4.03, 2000 Frederiksberg, Denmark

No 178, ECONtribute Discussion Papers Series from University of Bonn and University of Cologne, Germany

Abstract: We examine how beliefs about the debt-to-GDP ratio affect people’s attitudes towards gov-ernment 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 substan-tially 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.

Keywords: Government Debt; Political Attitudes; Beliefs; Expectations; Information (search for similar items in EconPapers)
JEL-codes: E60 P16 Z13 (search for similar items in EconPapers)
Pages: 84 pages
Date: 2022-07
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (22)

Downloads: (external link)
https://www.econtribute.de/RePEc/ajk/ajkdps/ECONtribute_178_2022.pdf First version, 2022 (application/pdf)

Related works:
Journal Article: Beliefs about public debt and the demand for government spending (2022)
Working Paper: Beliefs about Public Debt and the Demand for Government Spending (2020)
Working Paper: Beliefs About Public Debt and the Demand for Government Spending (2020)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ajk:ajkdps:178

Access Statistics for this paper

More papers in ECONtribute Discussion Papers Series from University of Bonn and University of Cologne, Germany Niebuhrstrasse 5, 53113 Bonn, Germany.
Bibliographic data for series maintained by ECONtribute Office ().