TY  - JOUR
AU  - Alesina,Alberto
AU  - Bayoumi,Tamim
TI  - The Costs and Benefits of Fiscal Rules: Evidence from U.S. States
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 5614
PY  - 1996
Y2  - June 1996
UR  - http://www.nber.org/papers/w5614
L1  - http://www.nber.org/papers/w5614.pdf
N1  - Author contact info:
Alberto F. Alesina
Department of Economics
Harvard University
Littauer Center 210
Cambridge, MA 02138
Tel: 617/495-8388
Fax: 617/495-7730
E-Mail: aalesina@harvard.edu

Tamim Bayoumi
International Monetary Fund
700 19th Street NW
Washington, DC 20431
E-Mail: tbayoumi@imf.org
AB  - This paper shows that in American states balanced budget rules are effective in enforcing fiscal discipline but they have no costs in terms of increased output variability.  More specifically, we show that tighter fiscal rules are associated with larger average surplus and lower cyclical variability of the budget balance.  However, the lower flexibility of the budget balance does not affect state output variability.
ER  -