State Saving Behavior: Effects of Two Fiscal and Budgetary Institutions
University of Georgia - Department of Public Administration and Policy
William D. Duncombe
Syracuse University, Maxwell School of Citizenship and Public Affairs
Public Budgeting & Finance, Vol. 28, Issue 3, pp. 48-67, Fall 2008
This paper explores how state saving behavior is affected by two fiscal/budgetary institutionsbudget stabilization funds (BSF) and balanced budget requirements (BBR). While adopted for different reasons, BSF and BBR could have significant effects on state savings behavior depending on their design features. We empirically examine the effects of BSF and BBR using a panel data set that covers three business cycles, controlling for budgetary institutions, state economy, social services, politics, and business cycles. The paper finds that adopting BSF and BBR can raise savings by 2 and 3 percentage points, respectively; however, the effects depend crucially on the devices' design.
Number of Pages in PDF File: 20Accepted Paper Series
Date posted: August 11, 2008
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