Intertemporal analysis of state and local government spending: Theory and tests

Douglas Holtz-Eakin, Harvey S. Rosen, Schuyler Tilly

Research output: Contribution to journalArticle

18 Scopus citations

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.

Original languageEnglish (US)
Pages (from-to)159-174
Number of pages16
JournalJournal of Urban Economics
Volume35
Issue number2
DOIs
StatePublished - Jan 1 1994

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics
  • Urban Studies

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