Government Size and Automatic Stabilizers: International and Intranational Evidence

Antonio Fatas and Ilian Mihov

No 2259, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This paper studies the role of automatic stabilizers using a sample of OECD countries and US states. We find that there is a strong and robust negative correlation between measures of government size and the volatility of output. This correlation is robust to the inclusion of a large set of controls as well as to alternative methods of detrending and estimation. The economic significance of this relationship is larger for the US states.

Keywords: Automatic Stabilizers; Business Cycles; Fiscal Policy; Intranational Economics (search for similar items in EconPapers)
JEL-codes: E6 F41 (search for similar items in EconPapers)
Date: 1999-10
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Citations: View citations in EconPapers (19)

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Journal Article: Government size and automatic stabilizers: international and intranational evidence (2001)
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