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Government Size and Automatic Stabilizers: International and Intranational Evidence

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  • Fatás, Antonio
  • Mihov, Ilian

Abstract

This paper studies the role of automatic stabilizers using a sample of OECD countries and US states. We find that there is a strong and robust negative correlation between measures of government size and the volatility of output. This correlation is robust to the inclusion of a large set of controls as well as to alternative methods of detrending and estimation. The economic significance of this relationship is larger for the US states.

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Bibliographic Info

Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 2259.

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Date of creation: Oct 1999
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Handle: RePEc:cpr:ceprdp:2259

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Related research

Keywords: Automatic Stabilizers; Business Cycles; Fiscal Policy; Intranational Economics;

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