Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/73881
Authors: 
Leibrecht, Markus
Scharler, Johann
Year of Publication: 
2012
Series/Report no.: 
Working Papers in Economics and Statistics 2012-04
Abstract: 
In this paper we analyze how the availability of credit influences the relationship between government size as a proxy for fiscal stabilization policy and the amplitude of business cycle fluctuations in a sample of advanced OECD countries. Interpreting relatively low loan-tovalue ratios as an indication for tight credit constraints, we find that government size exerts a stabilizing effect on output and consumption growth fluctuations only when credit constraints are relatively tight. Our results are robust with respect to different measures of government size and provide support for the hypothesis that credit market frictions play a crucial role in the transmission of fiscal policy.
Subjects: 
business cycle
volatility
fiscal policy
stabilization policy
JEL: 
E62
E32
Document Type: 
Working Paper

Files in This Item:
File
Size
497.5 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.