Abstract

RAMIREZ CEDILLO, Eduardo  and  LOPEZ HERRERA, Francisco. Fiscal synchronization at subnational level? Mexico 1989-2016. Inv. Econ [online]. 2018, vol.77, n.305, pp.40-73. ISSN 0185-1667.  https://doi.org/10.22201/fe.01851667p.2018.305.67620.

The relationship between income and expenditure of the Mexican public sector at subnational level -including its level of response to recover from a fiscal imbalance-, key to the design of fiscal policy and public finance, has received little attention. This article contributes to the understanding of such relationship. Our theoretical framework is based on the four hypotheses found in the vast theoretical and empirical literature, which initially focused on the national level and later on the subnational level. The present study relies on data panel techniques considering the heterogeneity of the Mexican republic´s states. The evidence shows predominance of fiscal synchronization with good levels of response for the recovery from imbalances; some support for other hypotheses is also found.

Keywords : fiscal synchronization; subnational economy; public revenues and expenditures; fiscal policy; public finance.