This paper presents an analysis of some of the effects of inflation on state and local government fiscal performance during the last decade. Tn particular, this analysis provides estimates of the relative impact of inflation between 1972 and 1982 on state and Local government expenditures and revenues.

The inflation impact estimates take the form of index numbers. On the expenditure side the index numbers are measures of the growth in government expenditures that would have been required to maintain a fixed level of seal inputs and a constant level of real income for government employees and aid recipients who were on board at the beginning of the period. On the revenue side the index numbers show the revenue growth that the revenue base at the beginning of the period could have produced if governments had been able to capture all of the inflation-induced revenue potential that occurred during the period.

This report is part of the collection of scanned historical documents available to the public.