Municipal Construction Spending: An Empirical Examination / Douglas Holtz-Eakin, Harvey S. Rosen.

By:

Holtz-Eakin, Douglas

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Material type: Text

TextSeries: Working Paper Series (National Bureau of Economic Research) ; no. w2989.Publication details: Cambridge, Mass. National Bureau of Economic Research 1989.Description: 1 online resource: illustrations (black and white)Subject(s):

E - Macroeconomics and Monetary Economics

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Abstract: Despite widespread concern and discussion, no consensus exists concerning the causes of the "infrastructure crisis." We investigate several models of the determination of local public capital expenditures. Using Euler equation methods, we find that the hypothesis that construction spending is determined by unconstrained, forward looking municipal planning cannot be rejected. consistent with this result, we find that the stochastic structure of own revenue and grant flows is an important feature of the determination of construction spending. Only unanticipated changes in a community's resources alter its demand for structures. An unanticipated increase in resources of one dollar increases current construction spending by about 5.5 cents.

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Item type	Home library	Collection	Call number	Status	Date due	Barcode	Item holds
Working Paper	Biblioteca Digital	Colección NBER	nber w2989 (Browse shelf(Opens below))	Not For Loan

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May 1989.

Despite widespread concern and discussion, no consensus exists concerning the causes of the "infrastructure crisis." We investigate several models of the determination of local public capital expenditures. Using Euler equation methods, we find that the hypothesis that construction spending is determined by unconstrained, forward looking municipal planning cannot be rejected. consistent with this result, we find that the stochastic structure of own revenue and grant flows is an important feature of the determination of construction spending. Only unanticipated changes in a community's resources alter its demand for structures. An unanticipated increase in resources of one dollar increases current construction spending by about 5.5 cents.