Do fiscal variables affect fiscal expectations? Experiments with real world and lab data

We generate observable expectations about fiscal variables through laboratory experiments
using real world data from several European countries as stimuli.We compare a VAR model
of expectations for data that is presented in a fiscal frame with one for neutrally presented
data.We test the validity of the setup and find that participants understand the meaning of
the fiscal variables, but also that their ability to perceive the correct characteristics of fiscal
policy is limited. Expectations are consistent neither with rational nor with purely adaptive
expectations, but instead follow an augmented-adaptive scheme.