This article uses Puerto Rico's ongoing financial crisis as an opportunity to explore complex policy issues that arise when a federalist regime's central government must decide whether – and how – to assist a struggling subnational government entity. It first describes Puerto Rico's dramatic...

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...