All real variables are deflated by the GDP deflator. All variables except the interest rate have been seasonally adjusted by the original sources. Appendix A provides the essential information on the construction of the government budget data from national sources; Perotti [2003] provides
the full details.
Table 4 displays basic summary statistics on the fiscal policy variables. The sample
average of government spending ranges from 20.4 percent of GDP in Australia to 23.5 in
Canada; government investment is typically little more than 3 percent of GDP (it is about
4 in the US, but it would be about 3 percent if purchases of weapons and weapons delivery
systems were reclassified from government investment to government consumption as in
the other countries). For the US, one can also estimate an upper bound to the GDP share
of government spending on goods with long production processes as the sum of total
government spending on machinery and equipment (less defense spending on software
and electronics) and structures: this amounts to about 3.5 percent of GDP.