This paper investigates how government size influences the responses of government expenditure and economic growth to broad dollar shocks in 155 trade-heavy countries across 6 continents from 1995 to 2019. In most cases, we document that the magnitude of contractions in expenditures and economic...

Causal association between trade openness and government size has gained interest of researchers and policy makers all around the world. These two crucial macroeconomic variables are of utmost importance when it comes to attainment of economic growth via the channel of globalization. This paper...