Government Size and Automatic Stabilizers: International and Intranational Evidence

31 Pages Posted: 1 Nov 1999

See all articles by Antonio Fatás

Antonio Fatás

INSEAD; Centre for Economic Policy Research (CEPR); ABFER

Ilian Mihov

INSEAD; Centre for Economic Policy Research (CEPR)

Date Written: July 1999

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.

JEL Classification: E6, F41

Suggested Citation

Fatas, Antonio and Mihov, Ilian, Government Size and Automatic Stabilizers: International and Intranational Evidence (July 1999). Available at SSRN: https://ssrn.com/abstract=177588 or http://dx.doi.org/10.2139/ssrn.177588

Antonio Fatas (Contact Author)

INSEAD ( email )

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HOME PAGE: http://faculty.insead.edu/fatas

Centre for Economic Policy Research (CEPR)

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ABFER ( email )

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Ilian Mihov

INSEAD ( email )

1 Ayer Rajah Avenue
Singapore, Singapore 138680
Singapore
+65 6799 5434 (Phone)

HOME PAGE: http://www.insead.edu/facultyresearch/faculty/personal/imihov/

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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