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Evidence for the Irrationality of Governmental Policy

  • Author(s): Brunell, Thomas;
  • Glazer, Amihai
  • et al.
Abstract

We examine three measures of governmental policy: state gasoline taxes, the federal discount rate, and the prime interest rate (which though set by banks is subject to political influence). All three variables show evidence of irrationality: they are not scale invariant (and thus violate Benford's Law) and show an aversion to use of the number ten.

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