Acconcia, Antonio; Corsetti, Giancarlo; Simonelli, Saverio - In: American Economic Review 104 (2014) 7, pp. 2185-2209
A law issued to combat political corruption and Mafia infiltration of city councils in Italy has resulted in episodes of large, unanticipated, temporary contractions in local public spending. Using these episodes as instruments, we estimate the output multiplier of spending cuts at provincial...