Grant Levels and Debt Issuance: Is There a Relationship? Is There Symmetry? |
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| Authors: | Christine R Martell Bridget M Smith |
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| Institution: | Graduate School of Public Affairs, University of Colorado at Denver, 1380 Lawrence Street, Suite 500, Denver, CO 80204;and Midwest Center for Health Services and Policy Research at Edward Hines Jr. VA Hospital, 5th and Roosevelt Road (151H), P.O. Box 5000, Hines, IL 60141 |
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| Abstract: | Although previous work on fiscal federalism and grants has focused on the effects of grants on expenditures, no published research examines the impact of decreasing grants on state financing. This research addresses how decreasing levels of federal grant money to states affect states' long-term debt issuance, and whether the relationship is symmetric for increasing and decreasing grants. The model is tested with time series, cross-sectional data from 1984 to 1999. The results show that grants affect debt issuance, the effect is asymmetric, and direction of the effect differs for different types of debt issuance. |
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