On the effectiveness and limits of fiscal stabilizers

Gerhard Reitschuler (1) , Jesus Crespo Cuaresma (2) , Maria Antoinette Silgoner (3)

1 Department of Economics
2 Department of Economics
3 Oesterreichische Nationalbank

The smoothing impact of fiscal stabilizers (proxied by government expenditures) on business cycle volatility is studied for a panel of EU countries in the period 1970-1999. Special emphasis is put on the investigation of possible nonlinearities in the relationship between GDP growth volatility and fiscal stabilizers. The results show that the business cycle volatility smoothing effect of fiscal stabilizers may revert at high levels. The results also hold when using government revenues as a proxy for fiscal stabilizers.

Mots clés: Social Sciences & Humanities

Gerhard Reitschuler, Jesus Crespo Cuaresma, Maria Antoinette Silgoner. On the effectiveness and limits of fiscal stabilizers. Applied Economics, 2009, pp.1. ⟨10.1080/00036840802600251⟩. ⟨hal-00582264⟩