IDEAS home Printed from https://ideas.repec.org/a/ucp/munifj/doi10.1086-mfj26040001.html
   My bibliography  Save this article

Distribution of the Effects of Savings Across Expenditure Types Over the Business Cycle—Evidence from the States

Author

Listed:
  • Yilin Hou

Abstract

This paper examines the distribution of the effects of counter-cyclical savings across three major expenditure types over the business cycle. Savings refers to budget stabilization funds (BSFs) and general fund balances (GFBs). The paper uses 1979–1999 panel data of 49 states to test the effects of BSFs and GFBs on general, own-source, and general-fund expenditures of the states during both downturns and upturns. The paper finds a division of work between the two devices. Although the use of BSFs concentrates on own-source spending, BSFs are used to boost general expenditure more than general-fund expenditure in downturns but to increase general-fund expenditure more than general expenditure in upturns. The effects of GFBs, however, are significant only on general-fund expenditure in upturns. This finding suggests that states may have some unstated “strategy” for when and where to use the two types of savings. The specifics of the strategy need to be further explored.

Suggested Citation

  • Yilin Hou, 2006. "Distribution of the Effects of Savings Across Expenditure Types Over the Business Cycle—Evidence from the States," Municipal Finance Journal, University of Chicago Press, vol. 26(4), pages 1-25.
    • Handle: RePEc:ucp:munifj:doi:10.1086/mfj26040001
    DOI: 10.1086/MFJ26040001
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1086/MFJ26040001
    Download Restriction: Access to the online full text or PDF requires a subscription.
    File URL: http://dx.doi.org/10.1086/MFJ26040001
    Download Restriction: Access to the online full text or PDF requires a subscription.
    File URL: https://libkey.io/10.1086/MFJ26040001?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ucp:munifj:doi:10.1086/mfj26040001. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Journals Division (email available below). General contact details of provider: https://www.journals.uchicago.edu/MFJ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.