Discussion paper

DP2259 Government Size and Automatic Stabilizers: International and Intranational Evidence

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.

£6.00
Citation

Fatas, A and I Mihov (1999), ‘DP2259 Government Size and Automatic Stabilizers: International and Intranational Evidence‘, CEPR Discussion Paper No. 2259. CEPR Press, Paris & London. https://cepr.org/publications/dp2259