The awarding of the Olympic Games to a certain city or the announcement of a city`s Olympic bid may be considered as a news shock that affects agents` market expectations. A news shock implies potential impacts on the dynamic adjustment process that change not only the volatility but also the long-run steady-state levels of endogenous economic variables. In this study, we contribute to and extend previous researchers` attempts to empirically test for the Olympic Games as a news shock by implementing full structural models and by matching Olympic hosts and bidders to structurally similar countries.
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