Government Size and Intersectoral Income Fluctuation: An International Panel Analysis

IMF Working Papers, April 1, 2007

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Government Size and Intersectoral Income Fluctuation: An International Panel Analysis

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Bibliographic details

• Authors: Daehaeng Kim, Chul-In Lee
• Published: April 1, 2007
• Series: IMF Working Papers
• DOI: https://doi.org/10.5089/9781451866575.001

Summary and core proposition

• Uses the between-sector variation in income as a new measure of economic uncertainty.
• Proposes simple models and presents supportive empirical evidence for causal relations between economic uncertainty and government size in the open economy setting.

Key empirical findings

• (1) A larger government reduces economic uncertainty.
• (2) An economy facing higher uncertainty has a larger government.
• (3) The government tends to resort to redistributive policies to reduce the uncertainty.
• (4) Government direct spending is also an effective option for the purpose.
• (5) Cross-sectional measure of economic uncertainty tends to rise when a country becomes more open to international trade.

Subjects and keywords

• Subject: Expenditure, Income shocks, Labor, Personal income, Terms of trade
• Keywords: government spending, open economy, WP

Authors and publication

• By Daehaeng Kim, Chul-In Lee
• Publication date: April 1, 2007
• Series: Working Paper No. 2007/093
• Issue: 093
• Volume: 2007
• Pages: 34

Identifiers and access

• DOI: https://doi.org/10.5089/9781451866575.001
• ISBN: 9781451866575
• ISSN: 1018-5941
• Stock No: WPIEA2007093

Source: IMF Working Papers — Government Size and Intersectoral Income Fluctuation: An International Panel Analysis