The dynamics of municipal fiscal adjustment

• 成果类型: Article
• 署名作者: Buettner, Thiess; Wildasin, David E.
• 署名单位: University of Kentucky; University of Munich
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/j.jpubeco.2005.09.002
• 发表日期: 2006
• 页码: 1115-1132
• 关键词: municipal fiscal policy; dynamic fiscal policy

摘要

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. (c) 2005 Elsevier B.V All rights reserved.