Great Recession and Fiscal Squeeze at U.S. Subnational Government Level

Jiri Jonas

No 2012/184, IMF Working Papers from International Monetary Fund

Abstract: The paper discusses the fiscal impact of the Great Recession of 2007-08 on state and local governments in the United States. It documents the sharp decline in tax revenue and discusses how states responded to close the budget gaps in order to obey the balanced budget provisions. It highligts the procyclical nature of this policy response, provides a brief comparison with subnational policy stances in other advanced economies, and discusses some options for making subnational fiscal policy less procyclical within the framework of current rules.

Keywords: WP; government; country; local government; state government; State budget; Fiscal policy; tax policy; local government finance; budget gap; property tax; job statistic; State tax collection; tax receipt; net government lending; government supplier; State nominal; local government employment; bond yield; Budget planning and preparation; Tax collection; Global financial crisis of 2008-2009; Subnational tax (search for similar items in EconPapers)
Pages: 40
Date: 2012-07-01
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Citations: View citations in EconPapers (4)

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