Financial openness, volatility, and the size of productive government

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dc.contributor.authorErauskin Iurrita, Iñaki
dc.date.accessioned2026-08-18T07:57:05Z
dc.date.available2026-08-18T07:57:05Z
dc.date.issued2011-06
dc.date.updated2026-08-18T07:57:05Z
dc.description.abstractThis paper analyzes the impact of financial openness on the size of the government in a stochastically growing small open economy when public spending is productive and volatility-reducing using a portfolio approach. The main result of the model is that economies that are more open are associated with a smaller productive public sector. The lower risk associated with more open economies due to risk diversification implies that the government is less inclined to increase the scale of its activity to maximize welfare when productive spending is also volatility-reducing. The empirical evidence based on a sample of 16 OECD countries for the period 1970–2004 broadly supports the main results of the model, even though some results are mixed.en
dc.description.sponsorshipFinancial support of Diputación Foral de Gipuzkoa (through the Departamento para la Innovación y la Sociedad del Conocimiento, via Red Guipuzcoana de Ciencia y Tecnología) and Gobierno Vasco (through the Grant Program to support the activities of research teams from the Basque University System)en
dc.identifier.citationErauskin Iurrita, I. (2011). Financial openness, volatility, and the size of productive government. SERIEs : Journal of the Spanish Economic Association, 2(2), 233-253. https://doi.org/10.1007/S13209-010-0029-0
dc.identifier.doi10.1007/S13209-010-0029-0
dc.identifier.issn1869-4195
dc.identifier.urihttps://hdl.handle.net/20.500.14454/6509
dc.language.isoeng
dc.publisherAsociación Española de Economía
dc.publisherSpringer Alemania
dc.rights© The Author(s) 2010
dc.subject.otherFinancial openness
dc.subject.otherVolatility
dc.subject.otherSize of government
dc.subject.otherProductive spending
dc.titleFinancial openness, volatility, and the size of productive governmenten
dc.typejournal article
dcterms.accessRightsopen access
oaire.citation.endPage253
oaire.citation.issue2
oaire.citation.startPage233
oaire.citation.titleSERIEs : Journal of the Spanish Economic Association
oaire.citation.volume2
oaire.licenseConditionhttps://creativecommons.org/licenses/by/2.0/
oaire.versionVoR
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