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The effect of state and local taxes on economic growth: A spatial dynamic panel approach
Author(s) -
Segura Jerome
Publication year - 2017
Publication title -
papers in regional science
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.937
H-Index - 64
eISSN - 1435-5957
pISSN - 1056-8190
DOI - 10.1111/pirs.12221
Subject(s) - endogeneity , panel data , economics , econometrics , instrumental variable , dynamic factor , estimation , fiscal policy , macroeconomics , set (abstract data type) , generalized method of moments , control variable , state (computer science) , panel analysis , computer science , management , algorithm , programming language , machine learning
This study revisits the growth effects associated with subnational fiscal policy. This, to my knowledge, is the first attempt to address the potential endogeneity of fiscal policy control variables. More specifically, the analysis used in this study implements a general method of moments spatial dynamic panel data model estimation procedure to arrive at a more refined set of estimates for the growth effects attributed to state and local fiscal policy. In deriving the estimable equation, this study extends a factor market approach for modelling regional output into a strategic interaction framework.