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The cyclical behaviour of fiscal policy: evidence from the OECD

  • Lane, Philip R.

This paper addresses the topic of cyclicality in fiscal policy. In particular, we show that the level of cyclicality varies across spending categories and across OECD countries. In line with leading theories of fiscal cyclicality, we show that countries with volatile output and dispersed political power are the most likely to run procyclical fiscal policies. Wage government consumption is highlighted as the most important channel by which these variables affect fiscal cyclicality

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

Volume (Year): 87 (2003)
Issue (Month): 12 (December)
Pages: 2661-2675

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Handle: RePEc:eee:pubeco:v:87:y:2003:i:12:p:2661-2675
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/505578

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  9. Michael Gavin & Ricardo Hausmann & Roberto Perotti & Ernesto Talvi, 1996. "Managing Fiscal Policy in Latin America and the Caribbean: Volatility, Procyclicality, and Limited Creditworthiness," Research Department Publications 4032, Inter-American Development Bank, Research Department.
  10. Fatas, Antonio & Mihov, Ilian, 2001. "Government size and automatic stabilizers: international and intranational evidence," Journal of International Economics, Elsevier, vol. 55(1), pages 3-28, October.
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  13. Lane, Philip R. & Tornell, Aaron, 1998. "Why aren't savings rates in Latin America procyclical?," Journal of Development Economics, Elsevier, vol. 57(1), pages 185-199, October.
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