Peacock-Wiseman hypothesis
The Peacock-Wiseman hypothesis (also level shift effect or level shift hypothesis ) is an attempt to explain the continuous increase in the state quota . It was established in 1961 by Alan T. Peacock and Jack Wiseman in the study "The Growth of Public Expenditure in the United Kingdom".
Core idea
Peacock and Wiseman assume that in social crisis situations such as war, the population's resistance to higher taxes and the associated increase in the state quota is low. As soon as the crisis situation is over, the population has got used to the high taxes. The state quota will only be reduced again to a limited extent. The course of the government quota over time would therefore have the shape of a staircase (pseudo trend).
rating
The hypothesis only partially coincides with empirical evidence . In fact, one could observe a continuous course of the government quota and not a staircase. In times of crisis there was often only a short-term deviation and then a return to the trend when it ended. The hypothesis is therefore not very satisfactory.
literature
- Alan T. Peacock and Jack Wiseman , The Growth of Public Expenditure in the United Kingdom , National Bureau of Economic Research Number 72, 1961