The distribution of income lies at the intersection of states and markets, both influencing and responding to government policy. Reflecting this reality, increasing research focuses on the political origins of inequality in the U.S. However, the literature largely assumes — rather than tests...

Can government spending have a large effect on private consumption and income? This paper uses a novel dataset on federal government disaster-relief spending, combined with both household and state-level consumption, income and employment data, to answer this question. My estimates show that the...