Do budget balance rules anchor budget balance expectations? -- Some international evidence

Conference object, Preprint OPEN
Rülke, Jan-Christoph ; Frenkel, Michael ; Lis, Eliza (2013)
  • Publisher: ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften, Leibniz-Informationszentrum Wirtschaft Kiel und Hamburg
  • Subject: H62 | H11 | H68
    • jel: jel:H62 | jel:H11 | jel:H68
      ddc: ddc:330

This is the first study that analyzes whether budget balance expectations are anchored and whether budget balance rules effectively anchor expectations. To this end, we use a unique data set which covers budget balance expectations in 17 countries that implemented a budget balance rules. While our results are mixed concerning the general impact of budget balance rules on anchoring expectations, we do find that specific features of budget balance rules are important to successfully anchor budget balance expectations.
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