Asymmetric and Non-Linear Adjustments in Local Fiscal Policy
AbstractWe introduce possible asymmetries and non-linearities in the analysis of the taxing and spending decisions of local governments. Our empirical results evidence a down-ward inflexibility of both local government spending and taxation, pointing to a budget-maximizing local government. These asymmetries will need to be explicitly tackled in fiscal federalism reforms, in order for decentralization to positively contribute to the achievement of the European Monetary Union objectives.
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Bibliographic InfoPaper provided by Centre for Economic Research, Keele University in its series Keele Economics Research Papers with number KERP 2006/16.
Length: 26 pages
Date of creation: Aug 2006
Date of revision:
Note: An earlier version of this paper has been presented at the North American Summer Meeting of the Econometric Society, and at the annual meeting of the European Public Choice Society. We would like to thank the participants for their useful feedback. The usual disclaimer applies.
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Postal: Centre for Economic Research, Research Institute for Public Policy and Management, Keele University, Staffordshire ST5 5BG - United Kingdom
Other versions of this item:
- Gabriella Deborah Legrenzi, 2009. "Asymmetric and Non-Linear Adjustments in Local Fiscal Policy," CESifo Working Paper Series 2550, CESifo Group Munich.
- H10 - Public Economics - - Structure and Scope of Government - - - General
- H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
- C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models &bull Diffusion Processes
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