Evidence about Debt Equivalence from the Local Public Sector

Donald Vitaliano

Public Finance = Finances publiques, 1988, vol. 43, issue 2, 295-309

Abstract: A conceptual framework and multiequation model of the local public sector and property market is developed in order to test the implications of the Ricardo-Barro debt equivalence hypothesis. Substituting one debt dollar for one dollar of current real property taxes to finance a given level of expenditure implies a one dollar reduction in aggregate property values if taxpayers discount future taxes arising from debt issue. Data referring to forty-eight New York State cities in 1980 are used to calibrate the model. Using both ordinary least squares and two stage least squares, no evidence to support debt equivalence is detected.

Date: 1988
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pfi:pubfin:v:43:y:1988:i:2:p:295-309

Access Statistics for this article

More articles in Public Finance = Finances publiques
Bibliographic data for series maintained by Christopher F. Baum ().