Furthermore, the level of government welfare services (including unemployment insurance, social security and welfare services, and senior citizens’ assistance insurance) is systematically lower in the United States than in the euro area countries; at present it stands 19 at 12% of GDP in the United States and at 15% of GDP in the euro area. Thirdly, the importance of automatic stabilisers depends also on the taxation system, in terms of its level  16  Cimadomo, J. (2008), Fiscal Policy in Real Time, ECB Working Paper, No 919. 17  See, for instance, Brunila, A., M. Buti and J. in’t Veld (2002), Cyclical Stabilisation Under the Stability and Growth Pact: How Effective are Automatic Stabilisers?, Bank of Finland Research Discussion Paper, No 6; Darby, J. and J. Melitz (2008), “Social spending and automatic stabilizers in the OECD”, Economic Policy, Vol. 23, pp. 715-756. 18  Girouard, N. and C. André (2005), Measuring Cyclically-Adjusted Budget Balances for OECD Countries, OECD Economics Department Working Paper, No 434. 19  Debrun, X., J. Pisani-Ferry and A. Sapir (2008), Government Size and Output Volatility: Should We Forsake Automatic Stabilization?, European Economy – European Commission Economic Paper, No 316. BIS Review 135/2008  7  of taxation and of the overall fiscal drag in the tax system.
Since 2000, and especially in recent months, the picture has changed. The mines have opted for another strategy and have cut back on price hedging. This strategy change can be partly attributed to more positive expectations regarding the gold price. As a result of the central bank agreement on gold sales, producers no longer fear large-scale sales by the central banks. Moreover, it seems that producers have recently become more upbeat in their assessment of private investment demand. It is interesting, in this respect, that gold producers' hedging activity tends to accelerate market trends. When they expect price decreases, prices do in fact decrease faster as a result of hedging, and when they expect price rises, prices do rise faster owing to the decrease in hedging. Such strategy changes, which are always due to changed market expectations, have to be reckoned with in future as well. •  Reviving private investment demand in the industrialised countries has also contributed to giving the gold price a boost. This phenomenon has been particularly pronounced in Japan, but Europe and the United States have also seen gold demand booming. Economic imponderables, concern over the financial health of some companies, heightened political tension in different parts of the world, the terror attacks of September 2001 and concomitantly subdued stock markets have caused investors to increase their holdings of the  BIS Review 39/2002  1  yellow metal. It seems as if gold is, for the time being, once again assuming its role of a safe haven investment.