Inthefaceofthislackofknowledge[abouttheconseq.pptVIP

“In the face of this lack of knowledge [about the consequences of the deficit], there was not much agreement on how important it was to reduce the deficit or how fast it needed to be done.” -Rubin (2003), summarizing her extensive interviews with legislators and other policymakers about the U.S. budget making process.;Disagreement, Delay, and Deficits;Why are fiscal (and other) reforms delayed?;Variance Effect;Findings;Measuring Information Quality;Third Variables and Other Influences: Political and Governance Culprits;Spearman Correlations Information Quality, Political Institutions, Governance ;Accuracy of Economic Statistics;Measuring Delay;Summary Statistics;Basic Error Correction Model with Asymmetric Adjustment;;Political and Information Effects: Fixed Effects with Interaction Terms;;;;;;Findings;Effect of Information Accuracy on Deficit Reduction Speed: (b3 + b4 ) ;Effect of Information Accuracy on Deficit Reduction Speed (Information Index);Primary Deficit vs. Public Deficit(Low Information Quality);Primary Deficit vs. Public Deficit(Higher Information Quality);Effect of Political Institutions on Reduction Speed; Effect of Governance Quality on Reduction Speed ;Information and Economic Outcomes;New Avenues for Research;“In the face of this lack of knowledge [about the consequences of the deficit], there was not much agreement on how important it was to reduce the deficit or how fast it needed to be done.” -Rubin (2003), summarizing her extensive interviews with legislators and other policymakers about the U.S. budget making process.;;Effect of Information Accuracy on Deficit Reduction Speed: (b3 + b4 ) Benchmark: “Sustainable” Deficit;Deficit Reduction Speeds: Individual Country Estimates;Adjustment Speed and Information Quality(OLS on Country Estimates);Adjustment Speed and Information Quality(OLS on Country Estimates)