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Consumption Smoothing through Fiscal Policy in OECD and EU Countries

In: Fiscal Institutions and Fiscal Performance

  • Adriana Arreaza
  • Bent E. Sgrensen
  • Oved Yosha

We measure the amount of smoothing achieved through various components of the government deficit in Eu and OECD countries. For EU countries, at the 1-year frequency, 13 % of shocks to GDP are smoothed via government consumption, 18 percent via transfers, 5 % via subsidies, while taxes provide no smoothing. The results for OECD countries are similar. Government transfers provide more smoothing of negative than of positive shocks among EU countries.

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This chapter was published in:
  • James M. Poterba & Jürgen von Hagen, 1999. "Fiscal Institutions and Fiscal Performance," NBER Books, National Bureau of Economic Research, Inc, number pote99-1, May.
  • This item is provided by National Bureau of Economic Research, Inc in its series NBER Chapters with number 8023.
    Handle: RePEc:nbr:nberch:8023
    Contact details of provider: Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
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