On the ease of overstating the fiscal stimulus in the US, 2008-9
AbstractThis note shows that the aggregate fiscal expenditure stimulus in the United States, properlyadjusted for the declining fiscal expenditure of the fifty states, was close to zero in 2009. Whilethe Federal government stimulus prevented a net decline in aggregate fiscal expenditure, it didnot stimulate the aggregate expenditure above its predicted mean. We discuss the implicationsof limitations on states' ability to run deficits for the design of fiscal stimulus at the federal level.We devote particular attention to intertemporal moral hazard concerns in a federal fiscal system,and ways to address these concerns.
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Bibliographic InfoPaper provided by Department of Economics, UC Santa Cruz in its series Santa Cruz Department of Economics, Working Paper Series with number qt5rf688t2.
Date of creation: 02 Feb 2010
Date of revision:
Social and Behavioral Sciences; fiscal union; federal fiscal expenditure; fiscal policy; moral hazard;
Other versions of this item:
- Joshua Aizenman & Gurnain Kaur Pasricha, 2010. "On the ease of overstating the fiscal stimulus in the US, 2008-9," NBER Working Papers 15784, National Bureau of Economic Research, Inc.
- Aizenman, Joshua & Pasricha, Gurnain K., 2010. "On the ease of overstating the fiscal stimulus in the US, 2008-9 ," Santa Cruz Department of Economics, Working Paper Series qt3vr12659, Department of Economics, UC Santa Cruz.
- E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
- F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
- H5 - Public Economics - - National Government Expenditures and Related Policies
- H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
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