Economics at your fingertips  

US State Fiscal Policy and Natural Resources

Alexander James

American Economic Journal: Economic Policy, 2015, vol. 7, issue 3, 238-57

Abstract: An analytical framework predicts that, in response to an exogenous increase in resource-based government revenue, a benevolent government will partially substitute away from taxing income, increase spending and save. Fifty-one years of US-state level data are largely consistent with this theory. A baseline fixed effects model predicts that a $1.00 increase in resource revenue results in a $0.25 decrease in nonresource revenue, a $0.43 increase in spending and a $0.32 increase in savings. Instrumenting for resource revenue reveals that a positive revenue shock is largely saved and the rest is transferred back to residents in the form of lower non resource tax rates. (JEL H71, H72, H76, Q38, R11)

JEL-codes: H71 H72 H76 Q38 R11 (search for similar items in EconPapers)
Date: 2015
Note: DOI: 10.1257/pol.20130211
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (24) Track citations by RSS feed

Downloads: (external link) (application/pdf) (application/zip) (application/zip)
Access to full text is restricted to AEA members and institutional subscribers.

Related works:
Working Paper: U.S. State Fiscal Policy and Natural Resources (2014) Downloads
Working Paper: U.S. State Fiscal Policy and Natural Resources (2013) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Ordering information: This journal article can be ordered from

Access Statistics for this article

American Economic Journal: Economic Policy is currently edited by Matthew Shapiro

More articles in American Economic Journal: Economic Policy from American Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Michael P. Albert ().

Page updated 2021-04-12
Handle: RePEc:aea:aejpol:v:7:y:2015:i:3:p:238-57