Information content and consensus effect of fiscal plans

Claudio  Columbano; Andrea Bafundi

doi:10.52292/j.estudecon.2025.4154

Autores

Claudio Columbano Università degli Studi Roma Tre, Italy https://orcid.org/0000-0003-3066-1080
Andrea Bafundi Università degli Studi di Padova, Italy https://orcid.org/0000-0002-3550-9355

DOI:

https://doi.org/10.52292/j.estudecon.2025.4154

Palavras-chave:

Fiscal policy, Treatment effect model, Event studies, Stock returns, Trading volume

Resumo

This paper investigated the extent to which fiscal plans provide novel information to investors and induce consensus over governments’ fiscal forecasts. Based on the mandatory disclosure requirements of the Stability and Growth Pact, we documented that fiscal plans are generally informative, but investors interpret their content differently. We further showed that, while fiscal plans that foresee spending cuts during downturns have substantial information content, they cause opinion divergence. Although these findings are consistent with recent evidence on the contractionary and uncertain effects of procyclical fiscal policy during recessions, they cast doubt on governments’ ability to anchor fiscal expectations in these periods.

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