Cover Image
Read Now

The Role of Fiscal Transfers in Smoothing Regional Shocks Evidence from Existing Federations

We assess the extent to which fiscal transfers smooth regional shocks in three large federations: the U.S., Canada, and Australia. We find that fiscal transfers offset 4-11 percent of idiosyncratic shocks (risk-sharing) and 13-24 percent of permanent shocks (redistribution). This fiscal insurance la...

Full description

Bibliographic Details
Main Author: Poghosyan, Tigran
Other Authors: Senhadji, Abdelhak, Cottarelli, Carlo
Format: eBook
Language:English
Published: Washington, D.C. International Monetary Fund 2016
Series:IMF Working Papers
Subjects:
Income
Fiscal Federalism
Secession
Disposable Income
Personal Income
Federalism
Fiscal Policy
National Accounts
Personal Income, Wealth, And Their Distributions
National Income
Macroeconomics
Intergovernmental Relations
Public Finance
Fiscal Transfers
Canada
Online Access:
Collection: International Monetary Fund - Collection details see MPG.ReNa
Description
Summary:We assess the extent to which fiscal transfers smooth regional shocks in three large federations: the U.S., Canada, and Australia. We find that fiscal transfers offset 4-11 percent of idiosyncratic shocks (risk-sharing) and 13-24 percent of permanent shocks (redistribution). This fiscal insurance largely operates through automatic stabilizers embedded in a central budget primarily through federal taxes and transfers to individuals, rather than transfers from the central government to state budgets. These results have implications for the design of fiscal risk-sharing mechanisms in the euro area
Physical Description:34 pages
ISBN:9781498379601

Similar Items