State fiscal policies and regional economic activity

Matthias Uhl

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.

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Year of publication:	2014
Authors:	Uhl, Matthias
Publisher:	Marburg : Univ., Dep. of Business Administration & Economics
Subject:	Spending multiplier \| Tax multiplier \| Subnational government \| Multiplikator \| Multiplier \| Öffentliche Ausgaben \| Public expenditure \| Finanzpolitik \| Fiscal policy \| Steuerpolitik \| Tax policy \| Länderfinanzen \| State government finance \| Regionaler Multiplikator \| Regional multiplier \| Theorie \| Theory