Thanks Ebony for sharing some links to Rainy Day Fund information…This Reuters piece discusses how states made use of their funds during the recession, and this local piece from Watertown, MA features a new candidate for local office who laments that state rainy day funds are not being used for direct aid to his locality.
Tag Archives: recession
I really like the way they operationalized the concept of fiscal space; will probably include the NBER version of the work in next iteration of this class’ public debt module.
De facto fiscal space and fiscal stimulus: Definition and assessment
We have discussed the idea that evaluating the fiscal health with respect to debt of a particular jurisdiction also depends on the debt of its “dependents” and the situation of other jurisdictions which tax the same base to some extent (see discussion in Clingermayer and Wood (1995)). This NYT article discusses how cities risking bankruptcy may appeal instead to the state for support. What is the potential impact on the incentives facing cities regarding financial management?
Cities in debt turn to states, adding strain
Clingermayer, JC and BD Wood. 1995. Disentangling Patterns of State Debt Financing. The American Political Science Review 89, no. 1 (March): 108-120.
Just found this Vox EU site, started by some excellent economists. Inman is very reputable. This piece touches on some of the issues we discussed last night re: states are or are not like small open economies.
LINK (ADDED): http://www.voxeu.org/index.php?q=node/5512
Using states for macroeconomic fiscal policy
Robert P Inman
15 September 2010
What can we learn from US President Obama’s fiscal stimulus? This column argues that channelling the stimulus package through state governments exposed it to agency costs, free-riding problem, and political expediency. As a result, the stimulus has failed to meet its objectives at the state level. The lesson is that fiscal stimulus should be conducted centrally.
This opinion piece from the NYTimes touches on the question, can life be good in the absence of economic growth, or how can culture adjust to new realities…given Japan’s amazing economic trajectory in the 20th century, the young people who came of age during and after the "lost decade" of economic stagnation (which some think we are risking here in the US) have a very different perspective than their elders.
Japan and the Ancient Art of Shrugging
By NORIHIRO KATO
Published: August 21, 2010
It’s a relief to no longer have the second-largest economy in the world.