State Fiscal Policies and Regional Economic Activity

State Fiscal Policies and Regional Economic Activity

In this paper, I estimate a structural panel vector autoregression to study the consequences of changes in U.S. state government fiscal policies for local economic activity in the short-term. My main result is that the state-level spending multiplier is relatively small and the tax multiplier relati...

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I publikationen:MAGKS - Joint Discussion Paper Series in Economics (Band 46-2014)
Huvudupphovsman: Uhl, Matthias
Materialtyp: Artikel
Språk:engelska
Publicerad: Philipps-Universität Marburg 2014
Ämnen:
Spending multiplier
Subnational government
Tax multiplier
Wirtschaft
Economics
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Sammanfattning:In this paper, I estimate a structural panel vector autoregression to study the consequences of changes in U.S. state government fiscal policies for local economic activity in the short-term. My main result is that the state-level spending multiplier is relatively small and the tax multiplier relatively large. After four years, the government spending multiplier is 0.6 and the tax multiplier -2.62. This conclusion is found to be robust across different model specifications. I also find that both state spending and state revenue shocks increase out of state output.
Fysisk beskrivning:24 Seiten
ISSN:1867-3678
DOI:10.17192/es2024.0347

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