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Nonlinearities in the Effects of Debt and Fiscal Policy: Evidence from the States

Jo Anna Gray () and Joe Stone
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Jo Anna Gray: University of Oregon, Eugene, USA

Economic Research Guardian, 2012, vol. 2, issue 2, 152-159

Abstract: Evidence from a half century of experience by U.S. states identifies nonlinearities in the effects of debt and fiscal policy on growth. Effects are Keynesian for low to moderate levels of debt and stimulus but anti Keynesian for sufficiently high levels of debt or stimulus. Results are broadly consistent with those found in the cross-country studies of Adam and Bevan (2005) and Reinhart and Rogoff (2010).

Keywords: Fiscal policy; Stimulus; Debt; Deficit-finance; Growth (search for similar items in EconPapers)
JEL-codes: A00 E00 H00 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (2)

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