Fiscal spending multipliers: evidence from the 2009 American Recovery and Reinvestment Act

This paper estimates the “jobs multiplier” of fiscal spending using the state-level allocations of federal stimulus funds from the 2009 American Recovery and Reinvestment Act (ARRA). Specifically, I estimate the relationship between state-level federal ARRA spending and state employment outcomes from the time the Act was passed (February 2009) through the latest month of data (currently May 2010). Because actual state allocations of stimulus spending may be endogenous with respect to state economic outcomes, I instrument for stimulus spending using the state allocations that were anticipated immediately after the ARRA was passed, according to the Wall Street Journal and the Center for American Progress. To control for the counterfactual – what would have happened without the stimulus – I include several variables likely to be strong predictors of state employment growth. The results point to substantial heterogeneity in the impact of ARRA spending over time, across sectors, and across types of spending. The estimated jobs multiplier for total nonfarm employment is large and statistically significant for ARRA spending through March 2010, but falls considerably and becomes insignificant in April and May. The implied number of jobs created or saved by the spending is about 2.0 million as of March, but drops to 0.8 million as of May. Across sectors, the estimated impact of ARRA spending on construction employment is especially large, implying a 18.4% increase in employment (as of May 2010) relative to what it would have been without the ARRA. Lastly, I find that spending on infrastructure and other general purposes has a large positive impact, while spending on safety-net programs such as unemployment insurance and Medicaid reduces employment.American Recovery and Reinvestment Act of 2009 ; Fiscal policy - United States ; Employment

On the Complexity and Behaviour of Cryptocurrencies Compared to Other Markets

We show that the behaviour of Bitcoin has interesting similarities to stock and precious metal markets, such as gold and silver. We report that whilst Litecoin, the second largest cryptocurrency, closely follows Bitcoin's behaviour, it does not show all the reported properties of Bitcoin. Agreements between apparently disparate complexity measures have been found, and it is shown that statistical, information-theoretic, algorithmic and fractal measures have different but interesting capabilities of clustering families of markets by type. The report is particularly interesting because of the range and novel use of some measures of complexity to characterize price behaviour, because of the IRS designation of Bitcoin as an investment property and not a currency, and the announcement of the Canadian government's own electronic currency MintChip.Comment: 16 pages, 11 figures, 4 table

Reactions, Diffusion and Volume Exclusion in a Heterogeneous System of Interacting Particles

Complex biological and physical transport processes are often described through systems of interacting particles. Excluded-volume effects on these transport processes are well studied, however the interplay between volume exclusion and reactions between heterogenous particles is less well known. In this paper we develop a novel framework for modeling reaction-diffusion processes which directly incorporates volume exclusion. From an off-lattice microscopic individual based model we use the Fokker--Planck equation and the method of matched asymptotic expansions to derive a low-dimensional macroscopic system of nonlinear partial differential equations describing the evolution of the particles. A biologically motivated, hybrid model of chemotaxis with volume exclusion is explored, where reactions occur at rates dependent upon the chemotactic environment. Further, we show that for reactions due to contact interactions the appropriate reaction term in the macroscopic model is of lower order in the asymptotic expansion than the nonlinear diffusion term. However, we find that the next reaction term in the expansion is needed to ensure good agreement with simulations of the microscopic model. Our macroscopic model allows for more direct parameterization to experimental data than the models available to date.Comment: 13 pages, 4 figure

Scotch Pine Deterioration in Michigan Caused by Pine Root Weevil Complex

Pine root tip weevil, Hylobius rhizophagus, and pine root collar weevil, H. radicis, attack certain Scotch pine stands simultaneously causing more mortality than expected from either insect alone. Recommendations for curtailing this insect complex include favoring red pine, planting Scotch pine far from brood sources, and avoiding stump culture of Christmas trees

Tax competition among U.S. states: racing to the bottom or riding on a seesaw?

This paper provides an empirical analysis of the determination of capital tax policy by U.S. states based on new panel data, a new econometric technique, and a new theoretical model. The analysis is undertaken with a panel data set covering all 48 contiguous states for the period 1969 to 2004 and is guided by the theory of strategic tax competition. The latter suggests that capital tax policy is a function of out-of-state tax policy, in-state and out-of-state economic conditions, and, perhaps most importantly, preferences for government services. Using the Common Correlated Effects Pooled estimator to account for cross-section dependence, and time lags to account for delayed responses, we estimate this reaction function for three state capital tax instruments: the investment tax credit rate, the corporate income tax rate, and the state's capital weight in its multi-state income apportionment formula. We find the slope of the reaction function--i.e., the equilibrium response of in-state to out-of-state tax policy--is negative, contrary to many prior empirical results. We document that a positive slope is obtained when either aggregate time effects or time lags are omitted. We show that the positive slope found in misspecified models is the result of synchronous responses among states to common shocks rather than competitive responses to out-of-state tax policy. While striking given prior findings in the literature, these results are not surprising. The negative sign is fully consistent with qualitative and quantitative implications of the theoretical model developed in this paper. Rather than "racing to the bottom," our findings suggest that states are "riding on a seesaw." ; Formerly titled: Tax Competition and Capital Mobility: Evidence from the U.S. StatesTaxation ; State finance

A state level database for the manufacturing sector: construction and sources

This document describes the construction of and data sources for a state-level panel data set measuring output and factor use for the manufacturing sector. These data are a subset of a larger, comprehensive data set that we currently are constructing and hope to post on the FRBSF website in the near future. The comprehensive data set will cover the U.S. manufacturing sector and may be thought of as a state-level analog to other widely used productivity data sets such as the industry-level NBER Productivity Database or Dale Jorgenson’s “KLEM” database or the country-level Penn World Tables, but with an added emphasis on adjusting prices for taxes. The selected variables currently available for public use are nominal and real gross output, nominal and real investment, and real capital stock. The data cover all fifty states and the period 1963 to 2006.Manufactures

POLICY RISK: AN EMPIRICAL ANALYSIS OF A MARKET FOR A GOVERNMENT-CREATED ASSET

This paper investigates the California dairy quota. The quota rate of return has been relatively high. The variability of returns is high relative to government bonds but not relative to the S&P500. Most of the returns are from monthly dividends, but most of the variability is from the capital gains.Livestock Production/Industries,