|dc.description.abstract||This dissertation comprises two related essays on ¯scal transparency and a third
essay on in°ation expectations.
The ¯rst chapter provides a brief introduction to the next three chapters.
The second chapter proposes some indices of ¯scal transparency based on the
IMF's Code of Good Practices on Fiscal Transparency. Each country is assigned a
category for a number of aspects of ¯scal transparency based on the information
in the IMF's \Fiscal Transparency Reports on Observance of Standards and Codes
(ROSC)". This classi¯cation is used to construct indices covering four clusters of ¯scal
transparency: data assurances, medium-term budgeting, budget execution reporting,
and ¯scal risk disclosures. I consider the robustness of these indices to di®erent choices
associated with construction of the indices. Lastly, I present some cross-country
comparisons of ¯scal transparency and analyze the relationship of other institutional
variables to ¯scal transparency.
The third chapter examines several hypotheses regarding ¯scal transparency using
the indices developed in the second chapter. I discuss the channels through which ¯s-
cal transparency can a®ect market credibility, ¯scal discipline, and corruption. After
controlling for other socio-economic variables, more transparent countries are shown
to have better credit ratings, better ¯scal discipline, and less corruption.
The ¯nal chapter considers the question whether in°ation expectations are driven
by household in°ation experience. Household surveys reveal that in°ation expecta-
tions vary considerably across households. Furthermore, studies have found that these
expectations vary systematically over demographic variables. This chapter suggests
that the variation in individual expectations of in°ation may be based partly on the
in°ation experienced by individual households. I calculate a household speci¯c level
of in°ation based on the BLS consumer expenditure survey (CEX) data. Then a two-
sample two-stage estimation methodology is used to study the correlation between
the experienced household in°ation and reported in°ation expectations data in the
Michigan Survey data for similar households. I ¯nd that expectations of in°ation
indeed vary with the in°ation experience, moreover personal experience seems to be