The revenues-expenditures nexus: evidence from local government data

D. Holtz-Eakin, W. Newey, H. S. Rosen

Research output: Contribution to journalArticle

57 Scopus citations

Abstract

This paper examines the intertemporal linkages between local government expenditures and revenues. The main results that emerge from an analysis of fiscal data from 171 municipal governments over the period 1972-1980 are that: 1) one or two years are sufficient to summarize the relevant dynamic interrelationships; 2) there are important intertemporal linkages between expenditures, taxes and grants; and 3) past revenues help predict current expenditures, but past expenditures do not alter the future path of revenues. This last finding is contrary to results that have emerged from previous analyses of federal fiscal data. -Authors

Original languageEnglish (US)
Pages (from-to)415-429
Number of pages15
JournalInternational Economic Review
Volume30
Issue number2
DOIs
StatePublished - Jan 1 1989

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics

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