Research - OCTOBER 3, 2022

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Moody’s Analytics: Most states are well prepared to weather a recession

by Released

The majority of U.S. states have the resources needed to get through an economic recession, according to a new study from Moody’s Analytics.

A record 43 states have the cash they need to weather an economic slump without having to resort to severe spending cuts or tax increases.

“States have never been in a better position to make it through a recession,” said Emily Mandel, the study’s author. “State policymakers seem to have learned a valuable lesson from the Great Recession, a period when tax revenue losses far outstripped savings.”

The Moody's Analytics study examines how well a state’s finances can carry it through an economic downturn. Economists at Moody’s Analytics ran stress tests on all 50 states to arrive at an estimate of each state’s recessionary needs in the event of a moderate recession. The study takes into account the impact of the business cycle on st

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