Public goods under financial distress

• 成果类型: Article
• 署名作者: Janas, Pawel
• 署名单位: California Institute of Technology; National Bureau of Economic Research
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2025.104205
• 发表日期: 2026-02
• 页码: 104205
• 关键词: Local public good provision; Financial distress; Great Depression; municipal bonds; new-deal; INVESTMENT; EMPLOYMENT; economies; IMPACT

摘要

I examine the effects of public debt on municipal services and real outcomes during financial crises using a unique archival dataset of U.S. cities from 1924 to 1943. Unlike today's countercyclical fiscal policies, the Great Depression provides a rare setting to observe fiscal shocks without substantial intergovernmental or Federal Reserve support. My findings show that financial market frictions-especially the need to refinance debt-led cities to sharply cut expenditures, particularly on capital projects and police services. As urban development halted during the Depression, cities with high pre-crisis debt levels faced significant austerity pressures, a decline in population growth, a rise in crime, and a departure of skilled public servants from municipal governments.