Government Consumption Volatility and the Size of Nations [E-Book] / Davide Furceri and Marcos Poplawski Ribeiro
Furceri, Davide.
Poplawski Ribeiro, Marcos.
Paris : OECD Publishing, 2009
36 p. ; 21 x 29.7cm.
OECD Economics Department Working Papers ; 687
Full Text
The aim of this paper is to analyze the relation between the volatility of government consumption and country size. Using a sample of 160 countries from 1960 to 2000 the main findings of our empirical analysis suggest that: 1) smaller countries have more volatile non-discretionary and discretionary government consumption, and also a more volatile government size; 2) the relation between government spending volatility and the size of a country is more negative for more volatile economies; 3) the relation between government consumption volatility and country size is more negative for functions of government spending that are characterized by a high level on non-rivality. The results are robust to different time and country samples, different econometric techniques and to several sets of control variables.