Fiscal Competition for Imperfectly-Mobile Labor and Capital: A Comparative Dynamic Analysis

David Wildasin ()

No 4463, IZA Discussion Papers from Institute for the Study of Labor (IZA)

Abstract: Interjurisdictional flows of imperfectly-mobile migrants, investment, and other productive resources result in the costly dynamic adjustment of resource stocks. This paper investigates the comparative dynamics of adjustment to changes in local fiscal policy with two imperfectly mobile productive resources. The intertemporal adjustments for both resources depend on complementarity/substitutability in production and the adjustment cost technologies for each, implying that the evaluation of the fiscal treatment of one resource must account for the simultaneous adjustment of both.

Keywords: fiscal competition; labor mobility; capital mobility; comparative dynamics (search for similar items in EconPapers)
JEL-codes: H22 H71 H87 J61 R58 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-mig and nep-ure
Date: 2009-10
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Working Paper: Fiscal Competition for Imperfectly-Mobile Labor and Capital: A Comparative Dynamic Analysis (2009)
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