The dynamics of municipal fiscal adjustment |
| |
| Institution: | 1. University of Palermo, Department of Economics, Business and Statistics (SEAS), Viale delle Scienze, 90128 Palermo, Italy;2. University of Coimbra, Faculty of Economics, Av. Dias da Silva, 165, 3004-512 Coimbra, Portugal;3. University of Minho, Economic Policies Research Unit (NIPE), Campus of Gualtar, 4710-057 Braga, Portugal;4. OECD, Economics Department, 2 rue Andre Pascal, 75775 CEDEX 16 Paris, France;5. University of Minho, Department of Economics, Campus of Gualtar, 4710-057 Braga, Portugal;6. London School of Economics and Political Science, LSE Alumni Association, Houghton Street, London WC2A 2AE, United Kingdom;1. University of Surrey, Guildford GU2 7XH, United Kingdom;2. University of Kent, United Kingdom |
| |
| Abstract: | The dynamic fiscal policy adjustment of local jurisdictions is investigated empirically using a panel of more than 1000 U.S. municipalities over a quarter of a century. Distinguishing own-source revenue, grants, expenditures, and debt service, the analysis is carried out using a vector error-correction model which takes account of the intertemporal budget constraint. The results indicate that a large part of the adjustment in response to fiscal imbalances takes place by offsetting changes in future expenditures. In addition, the results show that fiscal imbalances are financed to a significant extent by subsequent changes in grants. Decomposition of the sample according to average city population reveals that the basic pattern of fiscal adjustment is robust, although intergovernmental grants play a much more pronounced role in maintaining budget balance for large cities. |
| |
| Keywords: | |
| 本文献已被 ScienceDirect 等数据库收录！ |
|
