Some analysts blame the large state discretionary revenue increases of the early 1990's on recessionary declines in revenue and on federally mandated spending increases. Others cite rapid increases in state government spending, particularly on employee compensation, during the 1980's. Test the...

Static and dynamic translog cost models for the aggregate U.S. state and local government sector are estimated for 1952 to 1985. Inputs are capital, labor, and a combined nondurable goods and other services input, which includes "privatized" services. Estimates show that capital and labor are...