Dependence of Municipal Revenues on the Business Cycle in the Czech Republic

The aim of the paper is to examine the dependence of municipal revenues on the business cycle in the Czech Republic in the period 2001 - 2011. Municipalities are divided into four size categories. The correlation analysis is the basic method used for assessing the dependence of municipal revenues on business cycle expressed by GDP development. It was found that tax revenues (especially shared taxes) are significantly correlated and dependent on the GDP and the dependence increases with the size of municipalities. On the contrary, non-tax revenues are not affected by the business cycle. Dependence of intergovernmental transfers and capital revenues differs between size groups of municipalities.