Local public finance dynamics and hurricane shocks

Rhiannon Jerch, Matthew Kahn and Gary C. Lin

Journal of Urban Economics, 2023, vol. 134, issue C

Abstract: Since 1980, over 2,000 local governments in US Atlantic states have been hit by a hurricane. We study local government fiscal dynamics in the aftermath of hurricanes. These shocks reduce tax revenues, public expenditures, and debt financing in the decade following a hurricane. Hurricanes create collateral fiscal damage for local governments by increasing the cost of debt at critical moments after a strike. Municipalities with a 1 standard deviation-above-average racial minority composition suffer expenditure losses more than 2 times larger and debt default risk 8 times larger than the average municipalities in the decade following a hurricane strike.

Keywords: Local government budgets; Local government bonds; Natural disasters (search for similar items in EconPapers)
JEL-codes: H71 H72 H74 Q54 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (9)

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Related works:
Working Paper: Local Public Finance Dynamics and Hurricane Shocks (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:juecon:v:134:y:2023:i:c:s0094119022000924

DOI: 10.1016/j.jue.2022.103516

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