Cáliz Negrón, Miguel D.

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    The effect of the ARRA infrastructure funds to the economic cycles of the 50 U.S. states and Puerto Rico
    (2011-05) Cáliz Negrón, Miguel D.; Quintana Díaz, Julio C.; College of Arts and Sciences - Sciences; Alameda Lozada, José; Rolke, Wolfgang; Department of Mathematics; Seguel, Jaime
    This study is dedicated to examine how the distribution and expenditure of the funds of the American Recovery and Reinvestment Act (ARRA) of 2009 destined to infrastructure projects impacted the economic cycles of the 50 U.S. states and District of Columbia. The main contribution of the study was the implementation of Cluster Analysis to group the states based upon their economic condition prior ARRA and the magnitude of the impact of the ARRA Infrastructure Funds (ARRAIF) to the states economies. We also constructed a linear model using Least Squares Regression to measure the impact of other sectors of the economy to percentage change of real Gross Domestic Product (GDP) in 2009. The main result is that states in good economic shapes, that is, low unemployment rates and high Gross State Product (GSP) per capita, were the ones that received more ARRAIF per capita; and those states with high unemployment rates, and those highly hurt by the 2007 recession, received fewer ARRAIF per capita. The study also shows how the U.S. States can be classified within 10 clusters based upon geographical characteristics such as the population, and land and water surface area. Likewise the U.S. states can be grouped within 10 clusters but by that impact of the ARRAIF to their economies. So far we concluded that the American Recovery and Reinvestment Act of 2009 appears to be designed not to take off the economy out of recession and take it back before the banking collapse of 2008, but rather to maintain economic activity, since only 14% of the total worth of $787 billion is invested in infrastructure and science.