Support for Fiscal Consolidation in a Highly-Indebted Country

Takuji Fueki, Masashi Hino, Munechika Katayama and Taisuke Nakata
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Takuji Fueki: Hitotsubashi University
Masashi Hino: The University of Tokyo
Munechika Katayama: Waseda University
Taisuke Nakata: The University of Tokyo

No CARF-F-613, CARF F-Series from Center for Advanced Research in Finance, Faculty of Economics, The University of Tokyo

Abstract: Government debts have been increasing over the past several decades in many advanced economies, often raising concerns about fiscal sustainability. In this paper, we conduct an information provision experiment to understand the public’s view on fiscal consolidation. The public tends to underestimate the current debt-to-GDP ratio. We find that the provision of the current debt-to-GDP ratio tends to increase support for fiscal consolidation, whereas additional provision of a realistic future projection tends to attenuate that effect. We also find that fiscal policy views are heterogeneous along key socio-economic attributes, but the responses to information provision are not.

Pages: 50
Date: 2025-12
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Persistent link: https://EconPapers.repec.org/RePEc:cfi:fseres:cf613

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