Measuring Fiscal Sustainability on the Municipal Level: A German Case Study

Research Center for Generational Contracts Paper Series No. 35

Posted: 11 Mar 2009

See all articles by Christian Hagist

Christian Hagist

WHU - Otto Beisheim School of Management

Johannes Vatter

University of Freiburg - Research Center for Generational Contracts

Date Written: March 11, 2009

Abstract

The consequences of ageing populations for federal and state fiscal policies are, due to the research efforts of the last two decades, well known. However, it is rather less well known how the municipal level is affected. Therefore, by using a modification of the sustainability definition formulated by Blanchard, Chouraqui, Hagemann, and Sartor (1990) and the concepts of Auerbachs, Kotlikoffs and Gokhales Generational Accounting (1991) we define a new framework focusing on capital stock, financial management and depreciation of municipal assets. This papers purpose is to deliver a concept which is able to provide sound indicators for long-term budgeting by local authorities. We apply this framework to three German cities with different typologies, Munich, Freiburg and Schwabisch Hall.

Keywords: Fiscal sustainability, demographic transition, municipalities

JEL Classification: H61, J10, R51

Suggested Citation

Hagist, Christian and Vatter, Johannes, Measuring Fiscal Sustainability on the Municipal Level: A German Case Study (March 11, 2009). Research Center for Generational Contracts Paper Series No. 35 , Available at SSRN: https://ssrn.com/abstract=1357310 or http://dx.doi.org/10.2139/ssrn.1357310

Christian Hagist (Contact Author)

WHU - Otto Beisheim School of Management ( email )

Burgplatz 2
Vallendar, 56179
Germany

Johannes Vatter

University of Freiburg - Research Center for Generational Contracts ( email )

Bertoldstrasse 17
Freiburg, 79098
Germany

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