Fiscal Slack and Counter‐Cyclical Expenditure Stabilization: A First Look at the Local Level
Year: 2005
Type: article
Abstract: There is a rich literature on how state governments use slack fiscal resources—most often in the form of rainy day funds and budget stabilization funds—to minimize the effect of economic downturns. This paper presents the first known examination of whether slack resources have the same counter‐cyclical effects at the local level. It uses a panel data set to determine whether one particular form of local fiscal slack, general fund balance, stabilizes current annual expenditures among a sample of 103 Minnesota cities from 1990 to 2000. The findings suggest different fund balance portions have marginal but nonetheless important effects on expenditures.
Source: Public Budgeting & Finance
Author: Justin Marlowe
Institutions: University of Kansas, University of Washington
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W2005243672