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Government size and automatic stabilizers: international and intranational evidence

  • Fatas, Antonio
  • Mihov, Ilian

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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Article provided by Elsevier in its journal Journal of International Economics.

Volume (Year): 55 (2001)
Issue (Month): 1 (October)
Pages: 3-28

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Handle: RePEc:eee:inecon:v:55:y:2001:i:1:p:3-28
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/505552

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