Mobility, Population Growth, and Public Capital Spending in the United States
Marco Bassetto and
Leslie McGranahan ()
Review of Economic Dynamics, 2021, vol. 41, 255-277
We investigate the relationship between public capital spending and population movements at the state level. We document that gross mobility is positively correlated with capital spending across states and over time within states. We introduce an explicit, dynamic quantitative model of government spending determination, where gross mobility and population growth generate departures from Ricardian equivalence by shifting some costs and benefits of public projects to future state residents. The model is able to account for a large fraction of the correlation in the data. (Copyright: Elsevier)
Keywords: Public spending; Mobility; Ricardian equivalence; Political-economic equilibrium (search for similar items in EconPapers)
JEL-codes: H62 H63 (search for similar items in EconPapers)
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