Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/105081 
Authors: 
Year of Publication: 
2014
Series/Report no.: 
MAGKS Joint Discussion Paper Series in Economics No. 46-2014
Publisher: 
Philipps-University Marburg, Faculty of Business Administration and Economics, Marburg
Abstract: 
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.
Subjects: 
Spending multiplier
Tax multiplier
Subnational government
JEL: 
E62
H30
R50
Document Type: 
Working Paper

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