EFFICIENCY OF THE STATE FISCAL POLICY

The article discusses the definition, goals and main types of fiscal policy. It also provides an analysis of the effectiveness of fiscal policy in Uzbekistan based on the Laffer curve of indicators of the level of tax burden and elasticity of the tax system.

US State Fiscal Policy and Natural Resources

An analytical framework predicts that, in response to an exogenous increase in resource-based government revenue, a benevolent government will partially substitute away from taxing income, increase spending and save. Fifty-one years of US-state level data are largely consistent with this theory. A baseline fixed effects model predicts that a $1.00 increase in resource revenue results in a $0.25 decrease in nonresource revenue, a $0.43 increase in spending and a $0.32 increase in savings. Instrumenting for resource revenue reveals that a positive revenue shock is largely saved and the rest is transferred back to residents in the form of lower nonresource tax rates. (JEL H71, H72, H76, Q38, R11)