Cross-Region Transfer Multipliers in a Monetary Union : Evidence from Social Security and Stimulus Payments

US federal transfers to individuals are large, countercyclical, vary geographically, and are often credited with helping to stabilize regional economies. This paper estimates the short-run effects of these transfers using plausibly exogenous regional variation in temporary stimulus payments and perm...

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Main Author:	Pennings, Steven
Format:	Journal Article
Published:	American Economic Association 2021
Subjects:	BUSINESS CYCLE FISCAL POLICY SUBSIDIES SOCIAL PROTECTION STIMULUS PAYMENT COUNTERCYCLICAL POLICY INTERGOVERNMENTAL TRANSFERS
Online Access:	http://hdl.handle.net/10986/35532

id	okr-10986-35532
recordtype	oai_dc
spelling	okr-10986-355322021-07-19T16:30:01Z Cross-Region Transfer Multipliers in a Monetary Union : Evidence from Social Security and Stimulus Payments Pennings, Steven BUSINESS CYCLE FISCAL POLICY SUBSIDIES SOCIAL PROTECTION STIMULUS PAYMENT COUNTERCYCLICAL POLICY INTERGOVERNMENTAL TRANSFERS US federal transfers to individuals are large, countercyclical, vary geographically, and are often credited with helping to stabilize regional economies. This paper estimates the short-run effects of these transfers using plausibly exogenous regional variation in temporary stimulus payments and permanent Social Security benefit increases. States that received larger transfers tended to grow faster contemporaneously, with a multiplier of around 1.5 for permanent transfers and 1/3 for temporary transfers. Results are broadly consistent with an open-economy New Keynesian model. At business cycle frequencies, cross-region transfer multipliers are not large, suggesting only modest gains in regional stabilization from US federal automatic stabilizers. 2021-04-30T15:20:04Z 2021-04-30T15:20:04Z 2021-05 Journal Article American Economic Review http://hdl.handle.net/10986/35532 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo American Economic Association American Economic Association Publications & Research Publications & Research :: Journal Article
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
topic	BUSINESS CYCLE FISCAL POLICY SUBSIDIES SOCIAL PROTECTION STIMULUS PAYMENT COUNTERCYCLICAL POLICY INTERGOVERNMENTAL TRANSFERS
spellingShingle	BUSINESS CYCLE FISCAL POLICY SUBSIDIES SOCIAL PROTECTION STIMULUS PAYMENT COUNTERCYCLICAL POLICY INTERGOVERNMENTAL TRANSFERS Pennings, Steven Cross-Region Transfer Multipliers in a Monetary Union : Evidence from Social Security and Stimulus Payments
description	US federal transfers to individuals are large, countercyclical, vary geographically, and are often credited with helping to stabilize regional economies. This paper estimates the short-run effects of these transfers using plausibly exogenous regional variation in temporary stimulus payments and permanent Social Security benefit increases. States that received larger transfers tended to grow faster contemporaneously, with a multiplier of around 1.5 for permanent transfers and 1/3 for temporary transfers. Results are broadly consistent with an open-economy New Keynesian model. At business cycle frequencies, cross-region transfer multipliers are not large, suggesting only modest gains in regional stabilization from US federal automatic stabilizers.
format	Journal Article
author	Pennings, Steven
author_facet	Pennings, Steven
author_sort	Pennings, Steven
title	Cross-Region Transfer Multipliers in a Monetary Union : Evidence from Social Security and Stimulus Payments
title_short	Cross-Region Transfer Multipliers in a Monetary Union : Evidence from Social Security and Stimulus Payments
title_full	Cross-Region Transfer Multipliers in a Monetary Union : Evidence from Social Security and Stimulus Payments
title_fullStr	Cross-Region Transfer Multipliers in a Monetary Union : Evidence from Social Security and Stimulus Payments
title_full_unstemmed	Cross-Region Transfer Multipliers in a Monetary Union : Evidence from Social Security and Stimulus Payments
title_sort	cross-region transfer multipliers in a monetary union : evidence from social security and stimulus payments
publisher	American Economic Association
publishDate	2021
url	http://hdl.handle.net/10986/35532
_version_	1764483229859971072

Cross-Region Transfer Multipliers in a Monetary Union : Evidence from Social Security and Stimulus Payments

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