Intertemporal Analysis of State and Local Government Spending: Theory ad Tests

Douglas Holtz-Eakin, Harvey Rosen () and Schuyler Tilly

No 4261, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Do state and local governments smooth their consumption spending across years, or is their spending driven mainly by contemporaneous changes in resources? We design a test to determine which view of state and local spending is more consistent with the data. We find that state and local spending is determined primarily by current (as opposed to permanent) resources. That is, despite their apparent ability to skirt balanced budget laws, states and localities do not typically smooth their expenditures over time.

JEL-codes: H70 (search for similar items in EconPapers)
Date: 1994-05
Note: PE
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Related works:
Working Paper: Intertemporal analysis of state and local government spending: theory and tests (1989)
Journal Article: Intertemporal Analysis of State and Local Government Spending: Theory and Tests (1994)
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