Arbeitspapier
Sub-National Optimal Budget Allocation and Borrowing under Soft Budget Constraint
Local governments have borrowed largely from the banking system to finance their deficits instead of responding to the rigors of bond markets. This paper analizes how sub-national governments optimally reallocate the provision of public goods and decide on borrowing, in a model where the banking system faces a soft budget constraint. In contrast with recent literature, sub-national governments allocate a higher (lower) than optimal amount of resources to consumption public goods (infrastructure investment) and overborrow if they expect the banking system to be bailed out. Controls on sub-national borrowing like the golden rule seem to be inefficient to avoid excesive indebtedness at state level.
- Sprache
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Englisch
- Erschienen in
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Series: Bonn Econ Discussion Papers ; No. 24/2006
- Klassifikation
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Wirtschaft
- Thema
-
Fiscal federalism
soft budget constraints
local public investment
sub-national borrowing
- Ereignis
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Geistige Schöpfung
- (wer)
-
Crivelli, Ernesto
- Ereignis
-
Veröffentlichung
- (wer)
-
University of Bonn, Bonn Graduate School of Economics (BGSE)
- (wo)
-
Bonn
- (wann)
-
2006
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:42 MEZ
Datenpartner
Dieses Objekt wird bereitgestellt von:
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ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
Objekttyp
- Arbeitspapier
Beteiligte
- Crivelli, Ernesto
- University of Bonn, Bonn Graduate School of Economics (BGSE)
Entstanden
- 2006
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