The impact of late budgets on state government borrowing costs

• 成果类型: Article
• 署名作者: Andersen, Asger Lau; Lassen, David Dreyer; Nielsen, Lasse Holboll Westh
• 署名单位: University of Copenhagen
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/j.jpubeco.2013.10.004
• 发表日期: 2014
• 页码: 27-35
• 关键词: Fiscal governance; Late budgets; US states; Government borrowing cost; Sovereign bond spreads; Divided government; End-of-year balances

摘要

We analyze how a key component of fiscal governance, the ability of governments to pass a budget on time, affects government bond yield spreads. Based on a sample of 36 US states from 1988 to 1997, and using an original data set on budget enact, lent dates, we estimate that a 30 day budget delay has a cumulative impact that is equivalent to a one-time increase in the yield spread of around 10 basis points. States with sufficient liquidity incur no costs from late budgets, while unified governments face large penalties from not finishing a budget on time. (C) 2013 Elsevier B.V. All rights reserved.