@article{Arreaza:275631,
      recid = {275631},
      author = {Arreaza, Adriana and Sorensen, Bent E. and Yosha, Oved},
      title = {Consumption Smoothing Through Fiscal Policy in OECD and EU  Countries},
      address = {1997-12},
      number = {2123-2018-4994},
      series = {Working Paper No. 37-97},
      pages = {40},
      year = {1997},
      abstract = {We measure the amount of smoothing achieved through  various components of the government deficit in EU and OECD  countries. For EU countries, at the 1-year frequency, 13  percent of shocks to GDP are smoothed via government  consumption, 18 percent via transfers, 5 percent via  subsidies, while taxes provide no smoothing. The results  for OECD countries are similar. Government transfers  provide more smoothing of negative than of positive shocks  among EU countries. There seems to be no tradeoff between  high government deficits in a country and the ability to  smooth consumption. We find that in countries where there  is "delegation" of power or where fiscal targets are  negotiated effectively by coalition members, consumption  smoothing via government consumption and government  transfers is considerably higher. We interpret this finding  as evidence that effective budgetary institutions can  accomplish efficient consumption smoothing via government  deficit spending and lower average deficits.},
      url = {http://ageconsearch.umn.edu/record/275631},
      doi = {https://doi.org/10.22004/ag.econ.275631},
}