DP8516 For an Olive Wreath? Olympic Games and Anticipation Effects in Macroeconomics

Author(s): Markus Brückner, Evi Pappa
Publication Date: August 2011
Keyword(s): Anticipation, Mega Event, Natural Experiment
JEL(s): E62, E65
Programme Areas: International Macroeconomics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=8516

The hosting and bidding for the Olympic Games is a natural experiment to test for anticipation effects in macroeconomics. We examine these effects using panel data for 184 countries during the period 1950-2006. We find that hosting the Games generates positive investment, consumption, and output responses already before the hosting of the Games. We also detect significant anticipation effects in countries that bid for the Games. While bidding for the Games has a transitory level effect, hosting the Games has a permanent level effect.