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Journal Article
The federal budget in the transition economy
Newsletter
Should the federal government bail out the states? Lessons from past recessions
Like the economy in general, individual state economies are struggling in this recession. State governments face significant constraints in raising additional revenues. Most states are required to balance their budgets regardless of the economic environment. This article considers the role of the federal government in helping the states to manage their finances.
Journal Article
Pensions in peril
Discussion Paper
Is the United States Relying on Foreign Investors to Finance Its Bigger Budget Deficit?
The fiscal packages passed in 2020 and 2021 to help the economy cope with the pandemic caused a dramatic increase in federal government borrowing. One might have expected that foreign investors were important buyers of this new debt, but that was not the case. They were instead net sellers of Treasury securities. Still, the amount of money flowing into the United States increased last year, which helped fund the government’s borrowing, if only indirectly. The upturn in inflows, though, was quite modest as a surge in domestic personal saving largely covered the government’s heightened ...
Journal Article
Federal fiscal policy in the 1960's
Journal Article
The 1957 budget
Journal Article
The federal budget for 1956
Journal Article
Institutions and government growth: a comparison of the 1890s and the 1930s
Statistics on the size and growth of the U.S. federal government, in addition to public statements by President Franklin Roosevelt, seem to indicate that the Great Depression was the primary event that caused the dramatic growth in government spending and intervention in the private sector that continues to the present day. Through a comparison of the economic conditions of the 1890s and the 1930s, the authors argue that post-1930 government growth in the United States is not the direct result of the Great Depression, but rather is a result of institutional, legal, and societal changes that ...
Journal Article
On the size and growth of government
The size of the U.S. federal government, as well as state and local governments, increased dramatically during the 20th century. This paper reviews several theories of government size and growth that are dominant in the public choice and political science literature. The theories are divided into two categories: citizen-over-state theories and state-over-citizen theories. The relationship between the 16th Amendment to the U.S. Constitution and the timing of government growth is also presented. It is likely that portions of each theory can explain government size and growth, but the challenge ...
Working Paper
Partisan impacts on the economy: evidence from prediction markets and close elections
Political economists interested in discerning the effects of election outcomes on the economy have been hampered by the problem that economic outcomes also influence elections. We sidestep these problems by analyzing movements in economic indicators caused by clearly exogenous changes in expectations about the likely winner during election day. Analyzing high frequency financial fluctuations on November 2 and 3 in 2004, we find that markets anticipated higher equity prices, interest rates, and oil prices and a stronger dollar under a Bush presidency than under Kerry. A similar ...