Discussion Papers no. 153
On the simultaneous determination of current expenditure, real capital, fee income, and public debt in Norwegian local government
An extended community preference model including real and financial investments is estimated on accounting time-series data for the local public sector in Norway. The estimation results indicate considerable sluggishness in local public spending, both in current expenditure and investment spending. A positive shift in grants or taxes will in the short run lead to reductions in the net debt, due to the sluggish spending adjustment. But as spending adjustments take place, the effect on the net debt is reversed, so the long run effect is positive.
The long run elasticities of factor demand and net debt with respect to exogeneous income constraints do not differ significantly from unity. The estimated price elasticities suggest that factor demand is close to neutral-elastic in the long run. Higher factor prices involve higher production costs, and local authorities are thus induced to increase user charges.
Om publikasjonen
- Tittel
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On the simultaneous determination of current expenditure, real capital, fee income, and public debt in Norwegian local government
- Ansvarlig
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Audun Langørgen
- Serie og -nummer
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Discussion Papers no. 153
- Utgiver
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Statistics Norway, Research Department
- Emne
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Discussion Papers
- Antall sider
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31
- Målform
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Engelsk
- Om Discussion Papers
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Discussion papers comprise research papers intended for international journals and books. A preprint of a Discussion Paper may be longer and more elaborate than a standard journal article as it may include intermediate calculations, background material etc.
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