Fiscal Decentralization and Economic Growth in the United States

Danyang Xie, Heng-Fu Zou () and Hamid Davoodi
Additional contact information
Hamid Davoodi: International Monetary Fund

No 109, CEMA Working Papers from China Economics and Management Academy, Central University of Finance and Economics

Abstract: In a simple model of endogenous growth with spending by different levels of government, we demonstrate how fiscal decentralization affects the long-run growth rate of the economy. Applying the model to the U.S. economy, we find that the existing spending shares for state and local governments have been consistent with growth maximization. In this sense, further decentralization in public spending may be harmful for growth.

Pages: 12 pages
Date: 1999
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Citations: View citations in EconPapers (187)

Published in Journal of Urban Economics, Volume 45, Issue 2, March 1999, Pages 228-239

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Journal Article: Fiscal Decentralization and Economic Growth in the United States (1999)
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Persistent link: https://EconPapers.repec.org/RePEc:cuf:wpaper:109

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