Budget deficits and social protection: Cyclical government expenditure in the OECD

Andrew Abbott and Philip Jones

Economics Letters, 2012, vol. 117, issue 3, 909-911

Abstract: Countercyclical government spending offers social protection to the vulnerable when economies move into recession. This paper questions the extent to which governments are able to spend countercyclically and the extent to which social expenditures are likely to be countercyclical. An analysis of public spending in OECD countries (1980–2005) suggests countercyclical social protection is constrained by the limits to public borrowing and the degree of political polarization.

Keywords: Business cycles; Fiscal policy; Polarization; Voracity effects (search for similar items in EconPapers)
JEL-codes: E62 H50 H60 H70 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:117:y:2012:i:3:p:909-911

DOI: 10.1016/j.econlet.2012.07.011

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