U.S. State and Local Government Finances Over the Current Cycle

December 1, 1992

Preview Citation

Format: Chicago

Tamim Bayoumi. U.S. State and Local Government Finances Over the Current Cycle, (USA: International Monetary Fund, 1992) accessed September 20, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

The recent slowdown in the U.S. economy has led to state and local government tax increases and expenditure cuts that have lowered aggregate demand, in contrast to earlier downturns when the sector provided significant automatic stabilizers. Several explanations for this change are examined, including the role of federal grants, mandates, tax revolts, and compensation. The first three factors are found to be relatively unimportant. There does, however, appear to have been a large change in relative compensation over the 1980s, which can account for much of the deterioration in finances.

Subject: Economic sectors, Expenditure, Fiscal policy, Fiscal stance, Public sector, Revenue administration, Total expenditures

Keywords: Aggregate state government, Fiscal stance, Local government, Local government balance, Local government employee, Local government sector, Local government spending, Public sector, State government, Total expenditures, WP

Publication Details

Pages:

35
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 1992/112
Stock No:

WPIEA1121992
ISBN:

9781451853520
ISSN:

1018-5941

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