S 1 . Additional Methodological Details and Sensitivity Analysis

The Phillips-Perron unit root test was used to test for unit roots, using level or trend nonstationarity as the null [1]. (A unit root tests whether a variable y evolves as a random walk, i.e., with the dynamic relation yt = yt-1 + constant + deterministic trend + errort.) The KPSS test [1,2], which uses level or trend stationarity as the null, was used to confirm the results of the Phillips-Perron test and to check for sensitivity or results to choice of null hypothesis. The Phillips-Peron test may have low power in small samples [1], so the KPSS test and analysis of ACF/PCAFs were used to stationarity when there was a conflict and Phillips-Perron showed borderline significant results. Unit root tests were done using a testwise 5% significance level using the year as defined for the raw data (calendar year for health care expenditures, fiscal year for the rest). Automatic lag order selection was used for unit root tests and ACF/PACF analysis: ceiling(4[N/100]) for Phillips-Perron; Hobijn [3] automatic bandwidth selection for KPSS test; min(ceiling [N/2-1], 40) for ACF/PACF. The same procedures were used to test for stationarity in the regression residuals as for the dependent variables.