Output Fluctuations and Fiscal Policy: U.S. State and Local Governments 1978-1994
L. Wu and
Working Papers from Tel Aviv
What are the cyclical properties of U.S. state and local government fiscal policy? The budget surplus of local and, in particular, state governments is procyclical, smoothing disposable income and consumption of state residents. This happens over both short- and medium-term horizons. Procyclical surpluses are the result of strongly procyclical revenues, and weakly procyclical expenditures. The budgets of trust funds and utilities are procyclical. Federal grants are procyclical, exacerbating the cyclical amplitude of state level income movements; although they smooth the idiosyncratic component of shocks to state output. State and local budget surpluses are affected by balanced budget rules at the short- but not at the medium-term horizon. Further, budgets are less procyclical in conservative states.
Keywords: FISCAL POLICY; BUSINESS CYCLES; INCOME; CONSUMPTION (search for similar items in EconPapers)
JEL-codes: E6 E62 H72 (search for similar items in EconPapers)
References: Add references at CitEc
Citations: Track citations by RSS feed
There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.
Journal Article: Output fluctuations and fiscal policy: U.S. state and local governments 1978-1994 (2001)
Working Paper: Output Fluctuations and Fiscal Policy: US State and Local Governments 1978-1994 (1999)
Working Paper: Output fluctuations and fiscal policy: U.S. state and local governments 1978-1994 (1999)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:fth:teavfo:22-99
Access Statistics for this paper
More papers in Working Papers from Tel Aviv Israel TEL-AVIV UNIVERSITY, THE FOERDER INSTITUTE FOR ECONOMIC RESEARCH, RAMAT AVIV 69 978 TEL AVIV ISRAEL.. Contact information at EDIRC.
Bibliographic data for series maintained by Thomas Krichel ().