Guo, Q., C. Liu, G. Ma——Journal of Comparative Economics: How large is the local fiscal multiplier? Evidence from Chinese counties
时间:2016-06-21
The paper estimates local fiscal multipliers using annual data for 1800 China counties. The identification exploits a peculiar feature of the allocation mechanism of China's intergovernmental transfers that triggers exogenous variations on local public spending. When aggregate central-local transfers go up at the national level, National Poor Counties can receive a disproportionate amount of transfers. We therefore construct an instrument that captures this heterogeneity in the response of local