Did the Obama Stimulus Work?

The 2009 American Recovery and Reinvestment Act (ARRA) was the most far-reaching experiment in fiscal stimulus in the history of the American economy. It was designed to raise GDP and employment. Did it work? Or did state governments save, rather than spend, their stimulus money? In this PERI working paper, Stephen A. Marglin and Peter M. Spiegler find that approximately two-thirds of every ARRA dollar was spent by the states. Further, they argue that ideological bias has informed previous evaluations of this politically charged program, and they call for a higher standard of empirical fidelity in future analyses.

>>Read “Did the State Pocket the Obama-Stimulus Money? Lessons from Cross-Section Regression and Interviews with State Officials”

The Job Opportunity Cost of War

There is a common perception that war is good for the economy. But in a paper for the Costs of War Project based at Brown University, PERI Assistant Research Professor Heidi Garrett-Peltier finds that war spending creates significantly fewer jobs than other kinds of government spending. Stimulating war-related activity, she writes, forgoes opportunities to stimulate other types of economic activities, including manufacturing clean energy, or expanding access to education. She found that war spending over the past 14 years has resulted in lost opportunities of between one and three million jobs.

Read “The Job Opportunity Cost of War”

The Tax Adequacy Problem in the New England States

This PERI study by John Miller and Josh Mason examines the tax adequacy problem facing state governments—i.e., the failure of state governments’ tax bases to generate revenues in step with economic growth. The fiscal crisis of state governments precipitated by the Great Recession sharpened this problem of inadequate tax revenues, but, as this paper shows, the problem long predates the recession. The paper examines four key areas for state-level tax reform. These include increasing the relative share of personal income tax revenues; expanding the bases for both corporate income taxes and sales taxes; and increasing the states’ “rainy day fund” reserves. 

>> Read "The Tax Adequacy Problem in the New England States

Inequality in Air Quality: Worse than Income Inequality

James K. Boyce (PERI), Klara Zwickl and Michael Ash have written a paper for the Institute for New Economic Thinking (INET)’s Working Group on the Political Economy of Distribution. The paper compares environmental inequality for the 50 U.S. states and 435 Congressional districts, using data on exposure to industrial air toxics from the Risk-Screening Environmental Indicators of the EPA. In an interview about their findings, Jim Boyce says, “if you look how unequally environmental quality is distributed in the U.S., it actually makes inequality of the distribution of income look relatively modest.”  

>> Read "Three Measures of Environmental Inequality"

>> Read an interview with Jim Boyce on the INET blog (reposted to Huffington Post and elsewhere): "New Research Shows Pollution Inequality in America is Even Worse than Income Inequality"

Capital Flight from Africa: Causes, Effects and Policy Issues

Capital flight is a critical challenge to economic development in African countries. While Africa receives a substantial amount of capital inflows in the form of official development assistance, external borrowing and foreign direct investment, it also suffers a heavy financial hemorrhage through capital flight.

S. Ibi Ajayi (University of Ibadan) and Léonce Ndikumana (Director of PERI’s Africa Policy Program) have edited a new collection of analysis of capital flight from Africa with Oxford University Press. The book will be available in January 2015. Select chapters are available now as PERI Working Papers. Read them here:

>>“Capital Flight and Monetary Policy in African Countries,” by Hippolyte Fofack and Léonce Ndikumana 

>>“Capital Flight: Measurement and Drivers,” by Léonce Ndikumana, James K. Boyce and Ameth Saloum Ndiyae

>>“Governance and Illicit Financial Flows,” by Melvin D. Ayogu and Folarin Gbadebo-Smith

>>“Illicit Financial Flows and Stolen Assets Value Recovery,” by Melvin D. Ayogu and Julius Arbor

>>“Capital Flight and Poverty Reduction in Africa,” by Janvier D. Nkurunziza

>>“Strategies for Addressing Capital Flight,” by James K. Boyce and Léonce Ndikumana