e-journal

Knowledge and the political economy of TARP

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The purpose of this paper is to establish the consensus about the tremendous economic
success of the Troubled Asset Relief Program (TARP) and explore theories of popular disapproval of
TARP.
Design/methodology/approach – The analytical approach in this paper is a multivariate survey
logit based on two Pew Research Center surveys that include questions on knowledge of and views on
TARP. One survey is used to estimate a knowledge index of TARP that is applied to another survey to
estimate the impact of knowledge on opinions of TARP.
Findings – The author finds that knowledge of TARP is dependent in particular on education, party
affiliation, and sex. Controlling for partisan effects, views on TARP’s effectiveness are distorted by
limited knowledge of TARP in magnitudes that are politically significant.
Practical implications – Despite the severity and dramatic spillovers associated with banking
crises, decisive interventions may prove difficult to defend in retrospect in light of ignorance and an
inability to conceptualize the nature of the counterfactual.
Originality/value – This paper contributes to our understanding of the political economy of an
important and controversial economic policy, in particular the roles of ideology and knowledge in
accounting for public opposition to TARP. TARP is largely misunderstood. The author estimates a
model of TARP knowledge based on this misconception, and shows that education, party
affiliation/leaning, and sex are important predictors of TARP knowledge. By applying this model of
TARP knowledge to a separate survey dataset, the author demonstrates that knowledge of TARP
(along with political ideology) is an important predictor of support for TARP. By integrating two
different surveys, he is able to better identify the role played by knowledge of TARP, rather than
simply demographic characteristics.

Keywords Government policy and regulation, Financial institutions and services, Financial economics,
Decision making, Microeconomics, Macroeconomic policy, Public finance, Macroeconomics,
Financial markets, Money and interest rates, Financial crises

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Ketersediaan

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Informasi Detail

Judul Seri

Journal of Financial Economic Policy

No. Panggil

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Penerbit

: Emerald Group., 2013

Deskripsi Fisik

Journal of Financial Economic Policy Vol. 5 No. 3, 2013

Bahasa

English

ISBN/ISSN

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Klasifikasi

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Tipe Isi

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Tipe Media

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Tipe Pembawa

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Edisi

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Subjek

EKONOMI

Info Detail Spesifik

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Pernyataan Tanggungjawab

Asmawati/Syahrial

Versi lain/terkait

Lampiran Berkas

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