TY  - JOUR
AU  - Holtz-Eakin,Douglas
AU  - Rosen,Harvey S.
TI  - Municipal Construction Spending:  An Empirical Examination
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 2989
PY  - 1993
Y2  - April 1993
UR  - http://www.nber.org/papers/w2989
L1  - http://www.nber.org/papers/w2989.pdf
N1  - Author contact info:
Douglas Holtz-Eakin
American Action Forum
1401 New York Ave, NW
Suite 1200
Washington, DC 20005
E-Mail: dholtzeakin@americanactionforum.org

Harvey S. Rosen
Department of Economics
Fisher Hall
Princeton University
Princeton, NJ 08544-1021
Tel: 609/258-4022
Fax: 609/258-6419
E-Mail: HSR@princeton.edu
AB  - Despite widespread concern and discussion, no consensus exists concerning the causes of the "infrastructure crisis." We investigate several models of the determination of local public capital expenditures. Using Euler equation methods, we find that the hypothesis that construction spending is determined by unconstrained, forward looking municipal planning cannot be rejected. consistent with this result, we find that the stochastic structure of own revenue and grant flows is an important feature of the determination of construction spending. Only unanticipated changes in a community's resources alter its demand for structures. An unanticipated increase in resources of one dollar increases current construction spending by about 5.5 cents.
ER  -