Fiscal Competition in Space and Time: An Endogenous-Growth Approach

Daniel Becker () and Michael Rauscher ()

No CESifo Working Paper No. 2048, CESifo Working Paper Series from CESifo Group Munich

Abstract: Is tax competition good for economic growth? The paper addresses this question by means of a simple model of endogenous growth. There are many small jurisdictions in a large federation and individual governments benevolently maximise the welfare of immobile residents. Investment is costly: Quadratic installation and de-installation costs limit the mobility of capital. The paper looks at optimal taxation and long-run growth. In particular, the effects of variations in the cost parameter on economic growth and taxation are considered. It is shown that balanced endogenous growth paths do not always exist and effects of changes in installation costs are ambiguous.

JEL-codes: H21 H72 O41 (search for similar items in EconPapers)
Date: 2007
View citations in EconPapers

Downloads: (external link)
http://www.cesifo-group.de/DocCIDL/cesifo1_wp2048.pdf (application/pdf)

Related works:
Working Paper: Fiscal Competition in Space and Time: An Endogenous-Growth Approach (2007)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:ces:ceswps:_2048

Access Statistics for this paper

More papers in CESifo Working Paper Series from CESifo Group Munich
Address: Poschingerstrasse 5, 81679 Munich
Series data maintained by Julio Saavedra ().