TY - BOOK ID - 11275981 TI - Government Size and Output Volatility : Should We Forsake Automatic Stabilization? AU - Pisani-Ferry, Jean. AU - Debrun, Xavier. AU - Sapir, André. PY - 2008 VL - WP/08/122 SN - 1451914369 146233461X 9786612840760 1282840762 1451869827 1452752117 PB - Washington, D.C. : International Monetary Fund, DB - UniCat KW - Economic stabilization KW - Monetary policy KW - Adjustment, Economic KW - Business stabilization KW - Economic adjustment KW - Stabilization, Economic KW - Economic policy KW - Macroeconomics KW - Public Finance KW - Comparative or Joint Analysis of Fiscal and Monetary Policy KW - Stabilization KW - Treasury Policy KW - National Government Expenditures and Related Policies: General KW - Fiscal Policy KW - Macroeconomics: Consumption KW - Saving KW - Wealth KW - Public finance & taxation KW - Expenditure KW - Automatic stabilizers KW - Fiscal stabilization KW - Fiscal policy KW - Consumption KW - Expenditures, Public KW - Economics KW - United States UR - https://www.unicat.be/uniCat?func=search&query=sysid:11275981 AB - The paper takes stock of the debate on the positive link between output volatility and the size of government-which reflects automatic stabilizers. After a survey of the literature, we show that the contribution of automatic stabilizers to output stability may have disappeared since the 1990s. However, econometric analysis suggests that the breakdown in the government size-volatility relationship largely reflects temporary developments (better monetary management and financial intermediation). Once these factors are taken into account, the stabilizing role of government size remains important although little extra stability can be gained by expanding public expenditure beyond 40 percent of GDP. ER -