Do countries falsify economic data strategically? Some evidence that they might.

Tomasz Michalski 1, * Gilles Stoltz 1, 2, 3
* Corresponding author
3 CLASSIC - Computational Learning, Aggregation, Supervised Statistical, Inference, and Classification
DMA - Département de Mathématiques et Applications - ENS Paris, ENS Paris - École normale supérieure - Paris, Inria Paris-Rocquencourt
Abstract : Using Benford's Law, we find evidence supporting the hypothesis that countries at times misreport their economic data strategically. We group countries with similar economic conditions and find that for countries with fixed exchange rate regimes, high negative net foreign asset positions, negative current account balances or more vulnerable to capital flow reversals we reject the first-digit law for the balance of payments data. This corroborates the intuition of a simple economic model. The main results do not seem to be driven by countries in Sub-Saharan Africa or those with low institutional quality ratings.
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Tomasz Michalski, Gilles Stoltz. Do countries falsify economic data strategically? Some evidence that they might.. The Review of Economics and Statistics, 2013, 95 (2), pp.591-616. ⟨10.1162/REST_a_00274⟩. ⟨halshs-00482106v3⟩

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