The stabilizing role of government size

Journal of Economic Dynamics and Control

Volumn 32, Issue 2, 2008, Pages 571-593

  Andrés, Javier ^a   Doménech, Rafael ^a,b   Fatás, Antonio ^c  

^a UNIVERSITY OF VALENCIA   (Spain)

^b Economic Bureau of the Prime Minister   (Spain)

^c INSEAD   (France)

Author keywords

Automatic stabilizers; Government size; Output volatility

Indexed keywords

EID: 37849042809     PISSN: 01651889     EISSN: None     Source Type: Journal    
DOI: 10.1016/j.jedc.2007.02.006     Document Type: Article

References (49)

1. Agresti, A.M., Mojon, B., 2001. Some stylised facts on the euro area business cycle. ECB Working Paper No. 95.
2. Alesina A., and Perotti R. Fiscal adjustments in OECD countries: composition and macroeconomic effects. IMF Staff Papers 44 2 (1997) 210-248
3. Andrés J., and Doménech R. Automatic stabilizers, fiscal rules and macroeconomic stability. European Economic Review 50 6 (2006) 1487-1506
4. Ballabriga, F., Martínez-Mongay, C., 2002. Has EMU shifted policy? European Commission Economic Papers No. 166.
5. Baxter M., and King R.G. Fiscal policy in general equilibrium. American Economic Review 83 (1993) 315-334
6. Baxter M., and King R.G. Measuring business cycles: approximate band-pass filters for economic times series. The Review of Economics and Statistics 81 4 (1999) 575-593
7. Bernanke, B.S., Gertler, M., Gilchrist, S., 1999. The financial accelerator in a quantitative business cycle framework. In: Taylor, J.B., Woodford, M., (Eds.), Handbook of Macroeconomics, vol. 3. Elsevier, Amsterdam.
8. Blanchard, O., Perotti, R., 2002. An empirical characterization of the dynamic effects of changes in government spending and taxes on output. Quarterly Journal of Economics November, 1329-1348.
9. Bohn H. The behavior of public debt and deficits. The Quarterly Journal of Economics 113 (1998) 949-963
10. Buti M., and van den Noord P. Fiscal policy in EMU: rules, discretion and political incentives. Moneda y Crédito 218 (2004) 265-319
11. Calvo G. Staggered prices in a utility maximizing framework. Journal of Monetary Economics 12 3 (1983) 383-398
12. Canzoneri M.B., Cumby R.E., and Diba B. Is the price level determined by the needs of fiscal solvency?. American Economic Review 91 5 (2001) 1221-1238
13. Christiano, L.J., 2004. Firm specific capital and aggregate inflation dynamics in Woodford's model. Mimeo. Northwestern University.
14. Christiano J.L., and Eichenbaum M. Current real-business-cycle theories and aggregate labor market fluctuations. American Economic Review 82 3 (1992) 430-450
15. Christiano J.L., Eichenbaum M., and Evans C. Sticky price and limited participation models of money: a comparison. European Economic Review 41 (1997) 1201-1249
16. Cogley T., and Nason J.M. Effects of the Hodrick-Prescott filter on trend and difference stationary time series. Implications for business cycle research. Journal of Economic Dynamics and Control 19 (1995) 253-278
17. Cooley T.F., and Prescott E.C. Economic growth and business cycles. In: Cooley T.F. (Ed). Frontiers of Business Cycle Research (1995), Princeton University Press, Princeton, NJ
18. Corsetti G., and Roubini N. European versus American perspectives on balanced-budget rules. American Economic Review 86 2 (1996) 408-413
19. Doménech R., and Gómez V. Estimating potential output, core inflation and the NAIRU as latent variables. Journal of Business and Economic Statistics 24 3 (2006) 354-365
20. Doménech R., Ledo M., and Taguas D. Some new results on interest rates rules in EMU and in the US. Journal of Economics and Business 54 4 (2002) 431-446
21. Eichenbaum, M., Fisher, J., 2004. Evaluating the Calvo model of sticky prices. NBER Working Paper No. 10617.
22. Fatás A., and Mihov I. Government size and automatic stabilizers: international and intranational evidence. Journal of International Economics 55 1 (2001) 3-28
23. Fatás, A., Mihov, I., 2002. The effects of fiscal policy on consumption and employment: theory and evidence. Mimeo, INSEAD.
24. Galí J. Government size and macroeconomic stability. European Economic Review 38 1 (1994) 117-132
25. Galí J. Technology, employment, and the business cycle: do technology shocks explain aggregate fluctuations. American Economic Review 89 1 (1999) 249-271
26. Galí J., Gertler M., and López-Salido D. European inflation dynamics. European Economic Review 45 (2001) 1237-1270
27. Galí J., López-Salido D., and Vallés J. Understanding the effects of government spending on consumption. Journal of the European Economic Association 5 1 (2007) 227-270
28. Guo J.T., and Harrison S.G. Government size and macroeconomic stability: a comment. European Economic Review 50 5 (2006) 1339-1346
29. Leeper E. Equilibria under 'Active' and 'Passive' monetary and fiscal policies. Journal of Monetary Economics 27 (1991) 129-147
30. Leith C., and Wren-Lewis S. Interactions between monetary and fiscal policy rules. The Economic Journal 110 (2000) 93-108
31. Linnemann L., and Schabert A. Fiscal policy in the new classical synthesis. Journal of Money, Credit and Banking 35 6 (2003) 911-929
32. Maravall, A., del Río, A., 2001. Time aggregation and the Hodrick-Prescott filter. Working Paper No. 0108, Banco de España.
33. Martínez-Mongay, C., 2002. Fiscal policy and the size of governments. In: Buti, M., von Hagen, J., Martinez-Mongay, C. (Eds.), The Behavior of Fiscal Authorities. Stabilization, Growth and Institutions, Palgrave, Basingstoke (Chapter 5).
34. Martínez-Mongay, C., Sekkat, K., 2003. The trade-off between efficiency and macroeconomic stabilization in Europe. Working Papers CEB 04-024.RS, Université Libre de Bruxelles.
35. Mendoza E., Razin A., and Tesar L. Effective tax rates in macroeconomic cross-country estimates of tax rates on factor incomes and consumption. Journal of Monetary Economics 34 3 (1994) 297-324
36. Perotti, R., 2002. Estimating the effects of fiscal policy in OECD countries. Working Paper No. 168, European Central Bank.
37. Rebelo S. Real business cycle models: past, present, and future. Scandinavian Journal of Economics 107 (2005) 217-238
38. Rodrik D. Why do more open economies have bigger governments? Journal of Political Economy 106 5 (1998) 997-1032
39. Rotemberg, J.J., 2003. Stochastic technical progress, smooth trends, and nearly distinct business cycles. American Economic Review 1543-1559.
40. Sbordone A. Prices and unit labor costs: a new test of price stickiness. Journal of Monetary Economics 49 (2002) 265-292
41. Schmitt-Grohé S., and Uribe M. Balanced-budget rules, distortionary taxes and aggregate instability. Journal of Political Economy 105 5 (1997) 976-1000
42. Silgoner M.A., Reitschuler G., and Crespo-Cuaresma J. Assessing the smoothing impact of automatic stabilizers: evidence from Europe. In: Tumpel-Gugerell G., and Mooslechner P. (Eds). Structural Challenges for Europe (2003), Edward Elgar
43. Stock, J.H., Watson, M.W., 2002. Has the business cycle changed and why?. NBER Macroeconomics Annual 159-218.
44. van den Noord, P., 2000. The size and role of automatic fiscal stabilizers in the 1990s and beyond. OECD Economics Department Working Papers No. 230.
45. von Hagen, J., Hallet, A.C., Strauch, R., 2001. Budgetary consolidation in EMU. Economic Papers No. 148, European Communities.
46. Weber C.E. Intertemporal non-separability and rule-of-thumb consumption. Journal of Monetary Economics 49 (2002) 293-308
47. Woodford M. Control of the public debt: a requirement for price stability?. In: Calvo G., and King M. (Eds). The Debt Burden and Monetary Policy (1997), MacMillan, London
48. Woodford M. Interest and Prices Foundations of a Theory of Monetary Policy (2003), Princeton University Press, Princeton, NJ
49. Woodford M. Firm-specific capital and the new-Keynesian Philips curve. International Journal of Central Banking 1 2 (2005) 1-46