Asymmetric and Non-Linear Adjustments in Local Fiscal Policy

Gabriella Legrenzi ()

No CESifo Working Paper No. 2550, CESifo Working Paper Series from CESifo Group Munich

Abstract: We analyse the revenue-expenditure patterns of local governments, allowing for asymmetric and non-linear adjustments of local spending and taxation to disequilibrium errors. Our results provide evidence of a downward inflexibility of both local government spending and local taxation, pointing to a budget-maximising local government.

Keywords: fiscal federalism; fly-paper effect; non-linear time-series; asymmetric adjustment (search for similar items in EconPapers)
JEL-codes: C22 H10 H71 (search for similar items in EconPapers)
Date: 2009
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Related works:
Working Paper: Asymmetric and Non-Linear Adjustments in Local Fiscal Policy (2006)
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