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Demand for Government Spending: Do Our Beliefs About Public Debt Matter?

Author

Listed:
  • Stancea Andreea

    (National School of Political Science and Public Administration, Romania)

  • Ciocirlan Cecilia

    (National University of Political Studies and Public Administration, Romania, Institute for World Economy, Romanian Academy)

Abstract

Macroeconomic expectations play a major role in predicting individual choices and behavior. This paper examines the effects of public debt expectations and knowledge on demand for government spending measured by individual preferences. Using a unique survey dataset applied in Central and Eastern Europe, the results show that the most knowledgeable citizens tend to support the increase in public spending. Debt expectations also have a significant impact on public spending preferences: citizens who have negative debt expectations are less likely to support public spending increases. The results shed light on the importance of economic knowledge and information provision for shaping public attitudes about future taxation.

Suggested Citation

  • Stancea Andreea & Ciocirlan Cecilia, 2023. "Demand for Government Spending: Do Our Beliefs About Public Debt Matter?," Studia Universitatis Babeș-Bolyai Oeconomica, Sciendo, vol. 68(1), pages 1-20, April.
    • Handle: RePEc:vrs:subboe:v:68:y:2023:i:1:p:1-20:n:2
    DOI: 10.2478/subboec-2023-0001
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    More about this item

    Keywords

    public spending preferences; public debt expectations; economic knowledge; CESEE; public finance;
    All these keywords.

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs

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