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Uncovering patterns of state short-term debt financing

Paul C. Trogen (Department of Economics, Finance and Urban Studies, East Tennessee State University)

Journal of Public Budgeting, Accounting & Financial Management

ISSN: 1096-3367

Article publication date: 1 March 2000

Abstract

Despite balanced budget requirements, each year most states carry short term debt (STD) across fiscal years. Logit analysis results suggest structural fiscal stress causes states to carry STD across fiscal years. This strategy may not be rational, because STD is a tool for smoothing short-term shortfalls, and not for correcting structural fiscal stress. Cross sectional time series analysis results suggest both structural and cyclical factors influence the amount of year end STD. Findings suggest STD amounts fluctuate as a rational temporary replacement for long-term debt, growing when long term rates rise and decreasing when they fall.

Citation

Trogen, P.C. (2000), "Uncovering patterns of state short-term debt financing", Journal of Public Budgeting, Accounting & Financial Management, Vol. 12 No. 3, pp. 370-398. https://doi.org/10.1108/JPBAFM-12-03-2000-B002

Publisher

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Emerald Publishing Limited

Copyright © 2000 by PrAcademics Press