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Automatic Stabilizers?
Journal of Macroeconomics , 8(1), Winter 1986, pp. 43-54
Abstract: The effectiveness of "automatic stabilizers" is examined in a stochastic model similar to that of McCallum and Whitaker (1979), but where the "automatic stabilizers" are permitted to affect the elasticity of aggregate supply. These measures increase or decrease the variance of output for a closed economy, depending on the nature of the shocks to which it is subject, while for a small open economy these measures increase the variance of output.
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