Partisan Conflict and Government Spending - New Evidence From the United States

Xuan Hu, Agus Salim, Kai Shi and Meng Yan ()
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Meng Yan: School of Economics, Jilin University, China

Asian Economics Letters, 2022, vol. 3, issue 3, 8

Abstract: To understand and address the issue of how political party disagreement affects the dynamics of fiscal policy, we investigate the potential link between partisan conflict and government spending in the United States. We find that one standard deviation shock of the partisan conflict index reduces aggregate and disaggregated government spending, except in the health and general public service sectors, with the greatest reduction in the education sector.

Keywords: historical decomposition; vector autoregression; partisan conflict index; government spending (search for similar items in EconPapers)
JEL-codes: C22 E3 H3 (search for similar items in EconPapers)
Date: 2022
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