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Economic Analysis Of Effects Of Business Cycles On The Economy Of Cities: Inflation, The Business Cycle And State And Local Government Finances, 1972-1982


Authors:   

Release Date: 
February 1983 (92 Pages)
Posted Date:   
February 7, 2012



More than any other single factor, the performance of the national economy shapes the financial health of state and local governments.Slower economic growth, a higher rate of inflation, and recessions or the expectation of recessions all affect the structure and growth of state and local government budgets. Tn some cases, inflation and cyclical fluctuations increase budget deficits and push governments a step closer to insolvency, in others the unfavorable budgetary effects art: cushioned by revenue systems which are buoyant with respect to rising prices, and in still others the revenue-dampening effects of slow national growth and recession are more than offset by the gains from inflation and from regional shifts in economic activity. The nature of these effects, their measurement, and how they differ across state and local governments are important national policy concerns.


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