Automatic stabilizers and the size of government : correcting a common misunderstanding /
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| Author / Creator: | Cottarelli, Carlo. |
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| Imprint: | [Washington, D.C.] : International Monetary Fund, c2010. |
| Description: | 1 online resource (26 p.). |
| Language: | English |
| Series: | IMF working paper ; WP/10/155 IMF working paper ; WP/10/155. |
| Subject: | |
| Format: | E-Resource Book |
| URL for this record: | http://pi.lib.uchicago.edu/1001/cat/bib/14154600 |
| Summary: | The size of government is a commonly used variable in many analytical studies on the effects of fiscal policy. An accepted practice is to measure it as the ratio of government spending to GDP. However, this is not the correct metric when computing the stabilization effects of nondiscretionary fiscal policy. Intuitively, public spending does not react to cyclical conditions as much as taxes do - as reflected in the standard zero-one elasticity assumptions for spending and revenue, respectively. This paper shows that the revenue to GDP ratio is the appropriate indicator of government size for the purpose of assessing the stabilization effects of nondiscretionary fiscal policy. |
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| Item Description: | VI. ConclusionsFootnotes "July 2010". |
| Physical Description: | 1 online resource (26 p.). |
| Bibliography: | Includes bibliographical references. |
| ISBN: | 1462330517 9781462330515 1455293946 9781455293940 1282846272 9781282846272 9786612846274 6612846275 1455201383 9781455201389 145520059X 9781455200597 |