Government Consumption Volatility and Country Size
This paper provides empirical evidence showing that smaller countries tend to have more volatile government consumption for a sample of 160 countries from 1960 to 2000. The analysis also shows that country size is negatively related to the discretionary part of government consumption and to the volatilities of most of government consumption items. The results are robust to different time and country samples, different econometric techniques and to several sets of control variables.
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