Cyclically Adjusted Local Government Balance
Are you already subscribed?
Login to check
whether this content is already included on your personal or institutional subscription.
Abstract
The paper provides an analysis of cyclically-adjusted budget balances of Italian local governments for the period 2002-2007. We find that local government balances appear to be relatively sensitive to the business cycle. In particular, a shock of 1 percent in GDP changes their financial resources by approximately 0.6 billion of euro. Moreover, we find evidence that both central and local governments' policies had a sizeable impact on cyclically-adjusted local government balances.