Title
The behavior of U.S. States' debts and deficits
Document Type
Article
Publication Title
Public Sector Economics
Publication Date
9-1-2019
Abstract
Do governments satisfy an intertemporal budget constraint? This paper uses a panel of U.S. state data from 1978-1998 to empirically investigate whether primary surpluses respond to rising debt/GDP ratios. Instead of relying solely on the time-series characteristics of various data series, the paper focuses on the response of primary surpluses when cyclical fluctuations in output and government spending are explicitly considered. Results suggest no surplus response to the accumulation of debt, whether or not cyclical fluctuations are controlled for, in contrast to similar studies done using U.S. federal government data.
Volume
43
Issue
3
First Page
267
Last Page
289
DOI
10.3326/pse.43.3.3
Recommended Citation
Kula, M. (2019). The behavior of U.S. States' debts and deficits. Public Sector Economics, 43 (3), 267-289. https://doi.org/10.3326/pse.43.3.3
E-ISSN
24598860
