Recovery and Reinvestment Act spending at the state level: Keynesian stimulus or distributive politics?
نویسندگان
چکیده
We examine the US state-level pattern of American Recovery and Reinvestment Act (ARRA) spending. We relate spending to (1) Keynesian determinants of countercyclical policy, (2) congressional power and dominance, and (3) presidential electoral vote importance. We find that the ARRA is, in practice, poorly designed countercyclical stimulus. After controlling for political variables, coefficients on Keynesian variables are often statistically insignificant. When they are statistically significant they are often the “incorrect” sign. On the other hand, statistically significant effects are associated with majority party House of Representative appropriations subcommittee and authorization committee membership. One striking result is that the elasticity of ARRA spending with respect to the pre-ARRA ratio of federal grants and payments to federal taxes paid is estimated to be greater than unity in most specifications. States previously capturing large amounts of federal funds continue to do so under the ARRA stimulus.
منابع مشابه
Did the Stimulus Stimulate? Effects of the American Recovery and Reinvestment Act
We use state and county level variation to examine the impact of the American Recovery and Reinvestment Act on employment. A cross state analysis suggests that one additional job was created by each $107,000 in stimulus spending. Time series analysis at the state level suggests a smaller response with a per job cost of about $400,000. These results imply Keynesian multipliers between 0.5 and 1....
متن کاملFiscal Spending Jobs Multipliers: Evidence from the 2009 American Recovery and Reinvestment Act
This paper estimates the “jobs multiplier” of fiscal spending using the state-level allocations of federal stimulus funds from the 2009 American Recovery and Reinvestment Act (ARRA). Specifically, I estimate the relationship between state-level federal ARRA spending and the change in states’ employment outcomes from the time the Act was passed (February 2009) to some later month (through June 2...
متن کاملDid the Stimulus Stimulate? Real Time Estimates of the Effects of the American Readjustment and Recovery Act
We use state and county level variation to examine the impact of the American Readjustment and Recovery Act on employment. A cross state analysis suggests that one additional job was created by each $170,000 in stimulus spending. Time series analysis at the state level suggests a smaller response with a per job cost of about $400,000. These results imply Keynesian multipliers between 0.5 and 1....
متن کاملThe Polarizing Effect of the Stimulus: Partisanship and Voter Responsiveness to the American Recovery and Reinvestment Act
We examine the effect of a sudden influx of government spending, the 2009 American Recovery and Reinvestment Act (ARRA), on support for the President’s party. Using a difference-indifferences design, we find that stimulus spending had a modest positive effect on Democratic vote share, but only in counties that were already Democratic-leaning. In Republican counties, by contrast, government spen...
متن کامل