Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/334622 
Year of Publication: 
2025
Series/Report no.: 
CESifo Working Paper No. 12266
Publisher: 
Munich Society for the Promotion of Economic Research - CESifo GmbH, Munich
Abstract: 
This paper studies the causal effects of the 2024 US presidential election on business expectations of German manufacturing firms. It exploits the variation in the timing of survey responses to identify shifts in expectations around the election. The probability of reporting negative expectations increases by 12 percentage points. The effect is driven by exporters, especially those exposed to the US economy. It is concentrated among firms that had not anticipated Trump's re-election, indicating rational expectation updating. Firms reduce planned investment expenditures. The results provide novel evidence that firms are attentive and quickly revise expectations in response to salient policy events.
Subjects: 
election
survey expectation
export exposure
US president
rational inattention
JEL: 
D72
E32
E65
Document Type: 
Working Paper
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