Cyclical Economic Impacts on Aggregated Fiscal Imbalance Levels in the United States by Douglas A. Merriman MSM, University of Maryland University College, 2004 BS, Central Washington University, 1983 Dissertation Submitted in Partial Fulfillment of the Requirements for the Degree of Doctor of Philosophy Applied Management and Decision Science Walden University July 2015 The impacts of cyclical economic volatility on state-level fiscal imbalance levels have gained attention, given that beginning in late 2007, the United States experienced the deepest and longest-lasting recession in its history. The problem addressed by this study was whether there was a statistically significant relationship between certain economic factors and fluctuations in state-level fiscal imbalance levels in the U.S. during the period 2000 to 2010. The purpose of this study was to evaluate relationships between certain economic factors and state-level fiscal imbalance levels in the 48 contiguous U.S. states, and to assess how the presence and relational strength of these relationships varied during an economic cycle. Musgrave's theory of public economy, Oates's fiscal federalism theory, and Buchanan's fiscal imbalance theory served as the theoretical foundation. This longitudinal, time-series-cross-sectional study used multiple linear regressions to assess the relationships between the federal agency-provided datasets of unemployment, age, per capita income, poverty, entrepreneurial activity, gross state product, and the levels of fiscal imbalances in the 48 contiguous U.S. states during the period of 2000 to 2010. The study results provided evidence that the set of independent variables explained a significant amount of the overall fluctuation in fiscal imbalance levels from 2000 to 2010, and that the independent variables of unemployment rate, percent of population under the federal poverty level, and gross state product were related to fiscal imbalance levels with varying degrees of statistical significance and strength from one year to the next. The implication of the study for social change is that policy makers who understand these relationships may construct better policies to mitigate fiscal imbalance volatility and to encourage state-level fiscal equivalence across the United States.

This Master thesis is focused on the fiscal imbalance of the countries of the EMU, which deterioration was a consequence of the financial crisis. Most of the economies had to finance its deficits through the issuance of the sovereign bonds, which are associated with the longterm interest rates. The postcrisis development is characterized by the spread of sovereign bond yields. The thesis focuses on the determinants which have contributed to the spread. Moreover, the thesis discusses proposals for the common issuance of the eurobond which are seen as a solution of the debt market crisis.

Major issue of this thesis is fiscal imbalance, which is expressed by budget deficit and public debt. The aim is to find the main cause of the current state indebtedness of public finance. The basic hypothesis of this work is that the current state is not strictly caused by the economic downturn raised by the global economic crisis. The analysis is performed at 8 states of the European Union. The theoretical section is focused on the description of theoretical connections in the system of public finances, fiscal imbalances, business cycle and shaping of Economic and monetary union. The analytical part discusses the specific challenges like unemployment, persistent budget deficits and increasing public and private debts. The selected data are presenting through series of graphs.

The aim of this thesis is to focus on external imbalance and fiscal imbalance, which are recognized to be the cause of financial crisis in Europe, in Slovakia and Estonia. The first part of the thesis is dedicated to provide a theoretical background of external imbalance of current account deficit and deficit of balance of payment. As well to provide the definition of causes and consequences of creation of state budget, public debt and graphic interpretation of economic tools by using IS-LM-BP model. The aim of the practical part of my thesis is based on analysis of balance of, deficit of state budget and public debt of Slovakia and Estonia. I particularly focused on processes that vanish the imbalances by financing with and without debt, market equalization process and active economic policy. Furthermore, I designed a graphic evolution of Slovakia and Estonia in the period of time after the spread of financial crisis by using the IS-LM-BP model.