Stylized Facts of Government Finance in the G-7

Riccardo Fiorito

No 1997/142, IMF Working Papers from International Monetary Fund

Abstract: The stylized facts of government finance in the Group of Seven (G-7) industrial countries show that revenues lag real GDP procyclically, while government spending in most cases fails to lead the economy procyclically. This finding is not confined to transfers but also applies to the wage component of government consumption as well as, in most cases, to government fixed investment. Government deficits are always countercyclical but there is little evidence that stabilization is equally successful in stimulating the economy before shocks materialize.

Keywords: WP; business cycle; indirect tax; General government variable; government balance; Stylized Facts; Government Finance; government consumption; correlation coefficient; public goods; consumption share; negative correlation; interest expenditure in Japan; government outlay; Government consumption; Income and capital gains taxes; Consumption taxes; Business cycles; Europe; North America (search for similar items in EconPapers)
Pages: 54
Date: 1997-10-01
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Citations: View citations in EconPapers (19)

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