Small benefit from country size

Kazuto Masuda ()
Additional contact information
Kazuto Masuda: Bank of Japan

Economics Bulletin, 2009, vol. 29, issue 4, A26

Abstract: Furceri and Karras(2007, 2008) insisted that smaller countries are subject to more volatile business cycles than larger countries and country size really matters, using annual and quarterly data from 1960 to 2000. They measure country size with population size. In this paper, we calculate welfare benefit from the less volatile business cycle, that is the positive effect of country size in Japan, US and OECD average. For welfare measure, we choose “Welfare Cost of Business Cycle” approach following Obstfeld(1994). Our simple calculation shows that even if Fuerci and Karras(2007, 2008) is right, welfare benefit from country size is small, far less than 1% in terms of level of consumption. Therefore, we conclude that practically, population size does not bring a significant effect on welfare both in a short run and long run, as long as focusing on the severity of business cycle.

Keywords: Population size; Welfare Cost of Business Cycle (search for similar items in EconPapers)
JEL-codes: E2 J1 (search for similar items in EconPapers)
Date: 2009-12-09
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.accessecon.com/pubs/EB/2009/Volume29/EB-09-V29-I4-A26.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ebl:ecbull:eb-09-00763

Access Statistics for this article

More articles in Economics Bulletin from AccessEcon
Bibliographic data for series maintained by John P. Conley ().