 Government Size and Output Volatility: New International EvidenceErkki Koskela and Matti Virén No 339, Discussion Papers from VATT Institute for Economic Research Abstract: This paper re-examines the relationship between government size and output volatility from two perspectives. First, we use a wider international data set of 91 countries over the period 1980–1999 and thus not only the OECD data that have thus far been utilized. Second, we also allow for time series aspect by using panel data estimations. We have two new findings. First, the results from OECD countries about the negative relationship between output volatility and government size cannot be generalized to a wider international data set. Second, the relationship between government size and output volatility seems to be nonlinear. More precisely, the negative effect of government size on output volatility is significantly negative only for countries with high and small public sectors. Keywords: Automatic stabilizers, government size, output volatility, Macroeconomic policy, Talouspolitiikka, International comparisons, Kansainväliset vertailut, Taxation and Social Transfers, Julkisen talouden rahoitus ja tulonsiirrot, E320 - Business Fluctuations; Cycles, E620 - Macroeconomic Aspects of Fiscal Policy; Public Expenditures, Investment, and Finance; Taxation, H300 - Fiscal Policies and Behavior of Economic Agents: General, (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:fer:dpaper:339 Ordering information: This working paper can be ordered from Access Statistics for this paper More papers in Discussion Papers from VATT Institute for Economic Research Contact information at EDIRC. |
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