Municipal budgets, balance sheets, and acute fiscal shock

Robert S. Kravchuk

Chapter 11 in Research Handbook on City and Municipal Finance, 2023, pp 204-219 from Edward Elgar Publishing

Abstract: Not all financial emergencies can be adequately provided for in advance. When disasters strike, municipal governments exhibit acute preferences for liquidity. It is access to liquidity that permits an immediate disaster response. Governments will draw upon their existing (pre-disaster) balance sheet stocks of liquid and near-liquid assets. This highlights the vital importance a healthy mix of liquid (current) and non-liquid (noncurrent) assets, in ways that go beyond considerations of fiscal health under normal operating conditions. This chapter provides a framework for assessing the liquidity of governments’ balance sheets, employing a revised version of the late economist John R. Hicks’s classification of balance sheet assets into running, reserve, earning and investment asset categories. Hicks’s revised framework is recommended as means to both analyze governments’ relative preparedness to access liquidity on short notice, as well as to provide researchers with an analytical approach that frames government balance sheets in a useful manner.

Keywords: Economics and Finance; Politics and Public Policy Urban and Regional Studies (search for similar items in EconPapers)
Date: 2023
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.elgaronline.com/doi/10.4337/9781800372962.00018 (application/pdf)
Our link check indicates that this URL is bad, the error code is: 503 Service Temporarily Unavailable

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:elg:eechap:20063_11

Ordering information: This item can be ordered from
http://www.e-elgar.com

Access Statistics for this chapter

More chapters in Chapters from Edward Elgar Publishing
Bibliographic data for series maintained by Darrel McCalla ().