Abstract: How has the COVID-19 pandemic affected state budgets? Using a quarterly panel of states between 1994 and 2019, we estimate how changes in employment affect tax revenues. We find that a one percentage point (pp) rise in employment is associated with a 1.56pp rise in total tax revenue,...

We study to what extent U.S. state tax policy, tax revenues and expenditures are affected by independent political contributions. Using the Citizens United v. Federal Election Commission ruling for identification, we study tax policy outcomes in states where independent spending by corporations...

Arkansas is one of the poorest states in the United States, but it has a relatively high level of state government spending compared to similar states. This study examines the drivers of state spending and of spending increases in Arkansas. We investigate both the largest spending categories in...

Efforts to maintain balanced budgets, driven in part by formal requirements, lead to substantial pro-cyclicality in states' capital investments, transfers to local governments, and spending in areas like education and transportation. Extensive reliance on relatively volatile revenue sources...

In recent years debt in Colorado has increased at an unsustainable rate. A debt brake is simulated for the Colorado economy. When the debt brake is triggered the spending cap imposed by the Tabor Amendment is reduced, with surplus revenue earmarked for debt reduction. The simulation analysis...

We study the fiscal and tax response to intergovernmental grants, exploiting quasi-experimental variation within Germany’s fiscal equalization scheme triggered by Census revisions of official population counts. Municipal budgets do not adjust instantly. Instead, spending and investments adapt...

We study the fiscal and tax response to intergovernmental grants, exploiting quasi-experimental variation within Germany's fiscal equalization scheme triggered by Census revisions of official population counts. Municipal budgets do not adjust instantly. Instead, spending and investments adapt...

The 'starving the beast' hypothesis claims that tax cuts lead to lower public spending, rather than higher debt levels and higher taxes in the future. This paper uses the institutional setting of German fiscal federalism to its advantage in order to explore how fiscal policy reacts to exogenous...

In this study, we analyze the cyclicality of fiscal policies in China during the period 1978-2013. We find that the cyclicality of local government spending in China significantly affects the cyclicality of total government spending. By employing both time-series and province-level panel data,...

In this study, we analyze the cyclicality of fiscal policies in China during the period 1978-2013. We find that the cyclicality of local government spending in China significantly affects the cyclicality of total government spending. By employing both time-series and province-level panel data,...