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Economic Perspectives, Vol. 34, 3rd, No. 3, 2010
Improving the Impact of Federal Aid to the States

In response to recessions beginning in 1973, 2001 and 2007, the federal government provided financial aid to states, with the dual goals of stabilizing state finances and stimulating the economy. The timing of fund provision and the ultimate allocation of funds were often less than optimal. The authors look at how to design a more effective process for starting and stopping state aid.

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