Fiscal Policy Multipliers on Subnational Government Spending

• 成果类型: Article
• 署名作者: Clemens, Jeffrey; Miran, Stephen
• 署名单位: Stanford University
• 刊物名称: AMERICAN ECONOMIC JOURNAL-ECONOMIC POLICY
• ISSN/ISSBN: 1945-7731
• DOI: 10.1257/pol.4.2.46
• 发表日期: 2012
• 页码: 46-68
• 关键词: budget rules; business cycles; institutions

摘要

Balanced budget requirements lead to substantial pro-cyclicality in state government spending, with the stringency of a state's rules driving the pace at which it must adjust to shocks. We show that fiscal institutions can generate natural experiments in deficit-financed spending that are informative regarding fiscal stabilization policy. Alternative sources of variation in subnational fiscal policy often implicitly involve windfall financing, which precludes any effect of future debt or taxation on current consumption and investment. Consistent with a role for these Ricardian effects, our estimates are smaller than those in related studies, implying an on-impact multiplier below 1. (JEL C51, E32, E62, H72)