Cyclically adjusted local government balances

Eugenia Panicara (), Massimiliano Rigon () and Gian Maria Tomat ()
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Eugenia Panicara: Banca d'Italia
Massimiliano Rigon: Banca d'Italia
Gian Maria Tomat: Banca d'Italia

No 142, Questioni di Economia e Finanza (Occasional Papers) from Bank of Italy, Economic Research and International Relations Area

Abstract: The paper provides an analysis of cyclically-adjusted budget balances of local governments in Italy for the period 2002-07. We find that local government balances appear to be relatively sensitive to the business cycle. In particular, a shock of 1 per cent in GDP changes their resources by approximately 0.6 billion. Within the sample period, both central and local policies concerning local government budgets had a sizeable impact on local government balances in cyclically-adjusted terms.

Keywords: local public finance; budget sensitivity; business cycle; tax elasticity (search for similar items in EconPapers)
JEL-codes: E32 E62 H71 (search for similar items in EconPapers)
Date: 2012-12
New Economics Papers: this item is included in nep-acc, nep-mac, nep-pbe and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:bdi:opques:qef_142_12

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