The Dynamic Response of Municipal Budgets to Revenue Shocks

• 成果类型: Article
• 署名作者: Helm, Ines; Stuhler, Jan
• 署名单位: University of Munich; Universidad Carlos III de Madrid
• 刊物名称: AMERICAN ECONOMIC JOURNAL-APPLIED ECONOMICS
• ISSN/ISSBN: 1945-7782
• DOI: 10.1257/app.20220718
• 发表日期: 2024
• 关键词: Intergovernmental transfers; federal-grants; expenditures nexus; taxation; tax; asymmetries; adjustment; identify; POLICY; panel

摘要

We study the fiscal and tax response to intergovernmental grants, exploiting quasi-experimental variation within Germany's fiscal equalization scheme triggered by census revisions of population counts. Municipal budgets do not adjust instantly. Instead, spending and investments adapt within five years to revenue gains, while the adjustment to losses is more rapid. Yet the long-run response is symmetric. The tax response is particularly slow, stretching over more than a decade. Well-known empirical anomalies such as the so-called flypaper effect may thus reflect a short-run phenomenon, while long-run fiscal behavior appears more consistent with standard theories of fiscal federalism. ( JEL E62, H71, H72, H77, R51)