THE ISSUANCE OF STATE AND LOCAL DEBT DURING THE UNITED STATES GREAT RECESSION

This research explores the borrowing behavior of state and local governments between 2008 and 2010, a period that encompasses the Great Recession. State and local governments continued to borrow markedly during this period of severe fiscal stress. Following an overview of state-local debt and subnational government borrowing, we present a statistical analysis of the demographic, economic, political, and institutional factors that influenced interstate differences in borrowing. This research suggests that both economic and political factors influenced borrowing and that the availability of Build America Bonds contributed to an increase in borrowing during this period.