1. Do Countries Falsify Economic Data Strategically? Some Evidence that They Do
- Author
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Tomasz Kamil Michalski, Gilles Stoltz, Groupement de Recherche et d'Etudes en Gestion à HEC (GREGH), Ecole des Hautes Etudes Commerciales (HEC Paris)-Centre National de la Recherche Scientifique (CNRS), and HEC Paris Research Paper Series
- Subjects
public information provision ,Financial economics ,media_common.quotation_subject ,jel:D82 ,capital flows, public information provision, misinformation, Benford's law, transparency ,Exchange rate ,0502 economics and business ,Economics ,Quality (business) ,Misinformation ,Asset (economics) ,050207 economics ,misinformation ,Benford's law ,JEL: F - International Economics/F.F3 - International Finance/F.F3.F32 - Current Account Adjustment • Short-Term Capital Movements ,050205 econometrics ,media_common ,transparency ,capital flows ,05 social sciences ,JEL: F - International Economics/F.F3 - International Finance/F.F3.F31 - Foreign Exchange ,1. No poverty ,jel:F31 ,jel:F32 ,Current account ,jel:F33 ,jel:F34 ,Economic data ,JEL: F - International Economics/F.F3 - International Finance/F.F3.F34 - International Lending and Debt Problems ,Transparency (graphic) ,JEL: F - International Economics/F.F3 - International Finance/F.F3.F33 - International Monetary Arrangements and Institutions ,[SHS.GESTION]Humanities and Social Sciences/Business administration ,Economic model ,JEL: D - Microeconomics/D.D8 - Information, Knowledge, and Uncertainty/D.D8.D82 - Asymmetric and Private Information • Mechanism Design - Abstract
We find evidence supporting the hypothesis that countries at times misreport their economic data in a strategic manner. Among those suspected are countries with fixed exchange rate regimes, high negative net foreign asset positions or negative current account balances, which corroborates the intuition developed with a simple economic model. We also find that countries with bad institutional quality rankings and those in Africa, Middle East, Eastern Europe and Latin America release economic data of questionable veracity. Our evidence calls for models with public signals to consider strategic misinformation and for establishing independent statistical agencies to assure the delivery of high quality economic data.
- Published
- 2013