NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Intertemporal Analysis of State and Local Government Spending: Theory ad Tests

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

NBER Working Paper No. 4261 (Also Reprint No. r1884)
Issued in January 1993
NBER Program(s):   PE

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.

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Document Object Identifier (DOI): 10.3386/w4261

Published: Journal of Urban Economics, vol. 35, p. 159-174, 1994 citation courtesy of

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