What do voters know about the economy? A study of Danish data, 1990-1993

Eight questions asked in eight polls analyse what Danes know and expect abo ut the (macro) economy. As people have little interest in being well inform ed, it would be irrational if they were. However, half the voters know the number of unemployed. Their micro perceptions correspond to the macro figur es. Few people have realistic perceptions of inflation. They form largely s tatic inflationary expectations, but guess the direction of change with a p rediction bias. People know little about the balance-of-payments and the bu dget balance. The pattern of knowledge is much as expected, except for a st rong gender factor. The poll made just after an election shows an increase in economic knowledge. The increase disappears within a year. The findings correspond to basic facts found about economic voting: voters are myopic. A s their expectations are static, voting is retrospective, but knowledge gro ws at election time. We should hence expect vote and popularity functions t o differ. (C) 2000 Elsevier Science Ltd. All rights reserved.