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dc.contributor.authorCrivelli, Ernestoen_US
dc.date.accessioned2009-01-29T15:11:29Z-
dc.date.available2009-01-29T15:11:29Z-
dc.date.issued2006en_US
dc.identifier.urihttp://hdl.handle.net/10419/22969-
dc.description.abstractLocal 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.en_US
dc.language.isoengen_US
dc.publisheren_US
dc.relation.ispartofseriesBonn econ discussion papers 2006,24en_US
dc.subject.jelR5en_US
dc.subject.jelH7en_US
dc.subject.ddc330en_US
dc.subject.keywordFiscal federalismen_US
dc.subject.keywordsoft budget constraintsen_US
dc.subject.keywordlocal public investmenten_US
dc.subject.keywordsub-national borrowingen_US
dc.titleSub-National Optimal Budget Allocation and Borrowing under Soft Budget Constrainten_US
dc.typeWorking Paperen_US
dc.identifier.ppn525236260en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungen-
Appears in Collections:Bonn Econ Discussion Papers, Bonn Graduate School of Economics (BGSE), Universität Bonn

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