Cyclical Ratcheting in Government Spending: Evidence from the OECD

By Z. Hercowitz, Michel Strawczynski. Review of Economics and Statistics, 2004

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Targeting the Structural Balance (2007, unknown): “Hercowitz and Strawczynski (2004) find a similar “cyclical ratcheting” effect for government spending in OECD countries, while Balassone and Francese (2003) and Buti and Sapir (1998) confirm these results for OECD and EU countries, respectively.”
Cyclical asymmetry in fiscal variables in the EU (2010, methodology): “For instance, both Kaminsky et al. (2004) and Hercowitz and Strawczynski (2004) define good and bad times as periods in which real GDP growth is, respectively, higher and lower than “normal” (with the norm defined as the sample average or median).”
Fiscal Decentralization and the Business Cycle: An Empirical Study of Seven Federations (2010, background): “Hercowitz and Strawczynski (2004) demonstrate that this produces a ratchet effect among OECD central governments whereby government consumption as a share of GDP increases during expansions and is not fully offset during recessions.”
Stability and Growth in Europe: Towards a Better Pact (2004, background): “…are several papers documenting the cyclicality of public finances in industrialized countries, such as Fatás and Mihov (2002 a and b, Lane (2002), Hercowitz and Strawczynski (2001); Galí and Perotti (2002), balance and output falling below trend (upper left quadrant), and one tenth of…”