Do Countries Falsify Economic Data Strategically? Some Evidence that They Do

March 28, 2013 Leave a comment

Do Countries Falsify Economic Data Strategically? Some Evidence that They Do

Tomasz Kamil Michalski HEC Paris – Department of Economics and Decision Sciences

Gilles Stoltz Ecole Normale Superieure de Cachan; HEC Paris – Department of Economics and Decision Sciences

The Review of Economics and Statistics, Forthcoming
HEC Paris Research Paper No. 930/2010 

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.

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