The evolution of State-Local balance sheets in the United States, 1953–2013

Page-Hoongrajok, Amanda and Mason, J.W. and Jayadev, Arjun (2019) The evolution of State-Local balance sheets in the United States, 1953–2013. Journal of Post Keynesian Economics, 42 (1). pp. 90-113. ISSN 0160-3477

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Abstract

State and local debt in the United States more than doubled as a share of gross domestic product between 1953 and 2007. Using a historical accounting framework, we find that there is no straightforward relationship over time between state and local deficits and debt growth. We find that only 17 percent of the variation in aggregate state–local debt ratios comes from variation in the fiscal balance. This is especially true in the 1980s, the period of most rapid increase in state–local debt ratios. Before 1980, there were small but persistent deficits, but stable debt ratios. In the 1980s, state and local sectors shifted toward budget surpluses but saw rising debt ratios. This is explained by a faster pace of asset accumulation. Our results demonstrate the autonomy of balance sheet variables and suggest that changing debt ratios cannot be explained by real income and expenditure flows.

Item Type:	Article
Authors:	Page-Hoongrajok, Amanda and Mason, J.W. and Jayadev, Arjun
Document Language:	Language English
Uncontrolled Keywords:	State and local debt, debt dynamics, pensions, deficit
Subjects:	Social sciences > Economics > Public finance Social sciences > Economics > Macroeconomics & related topics Social sciences > Economics > Macroeconomics & related topics > Factors affecting income and wealth
Divisions:	Azim Premji University - Bengaluru > School of Arts and Sciences
Full Text Status:	Restricted
URI:	http://publications.azimpremjiuniversity.edu.in/id/eprint/7230
Publisher URL:	https://doi.org/10.1080/01603477.2018.1532797

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