Federal highway grants to states appear to boost economic activity in the short and medium term. The short-term effects appear to be due largely to increases in aggregate demand. Medium-term effects apparently reflect the increased productive capacity brought by improved roads. Overall, each...

This Economic Letter discusses how the unique economic nature of R&D may bear on the question of the constitutionality of state R&D tax credits. In particular, I discuss the conditions laid out by the U.S. Supreme Court for determining the constitutionality of a state tax credit and how economic...

Financial incentives from state governments are part of a growing trend of policies designed to spur innovation clusters in specific regions. Biotechnology industry clusters in particular have benefited from these subsidies, which have boosted the number of star biotech scientists in those...

State and local governments frequently offer tax incentives to attract businesses to locate in their area. Proponents view these incentives as a valuable tool to encourage economic development. Critics, on the other hand, argue either that incentives have little effect on business location...

Federal fiscal policy during the recession was abnormally expansionary by historical standards. However, over the past 2½ years it has become unusually contractionary as a result of several deficit reduction measures passed by Congress. During the next three years, we estimate that federal...

Are federal stimulus funds heading to those states best positioned to put the money to good use right away? This Letter compares the degree of economic need in different states with each state's expected share of funds from the American Recovery and Reinvestment Act of 2009.

This conference examined how the recent economic crisis has changed residential and development environments in many parts of the world. For example, the crisis has reduced home ownership and created pressure to increase neighborhood density in the United States. And, at least temporarily, it...

This Letter reviews the empirical evidence on the extent to which individuals' sense of well-being or happiness is related to metrics of the well-being of others.