Stress-Testing U.S. States

Helping states prepare for the next recession.

Two years of rapid, stimulus-fueled growth are quickly coming to a close and the specter of another recession is beginning to take shape. While a recession in the coming year is still far from certain, recessions and their place in the business cycle are an accepted fact of life in any organization, especially government. To help state governments better prepare themselves for the next recession, Moody's Analytics has taken to performing annual stress tests on their budgets.

This paper estimates the amount of fiscal stress likely to be applied to state budgets under a likely next recession scenario and compares that stress to the amount of money states have set aside in reserve.

Download Stress-Testing U.S. States: 2022