Fiscal shocks in Zurich prompt spending cuts, reveal policymakers' strategies.
The article looks at how sudden changes in tax revenue affect local government spending in Zurich, Switzerland. By using advanced computer techniques, the researchers found that when there's a big increase in revenue, the government tends to save some of it for later. But when revenue drops, they cut back on spending to make up for it. This shows that local policymakers try to keep public finances stable by adjusting their budgets in response to changes in revenue.