Regional allocation of public investment with transfer policy and agglomeration

Akiyoshi Furukawa ()
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Akiyoshi Furukawa: Department of Economics, Chukyo University

Economics Bulletin, 2012, vol. 32, issue 3, 1865-1872

Abstract: This paper analyses the allocation of public investment across heterogeneous regions when the government can use a regional transfer policy and individuals can migrate across regions. The government should choose the same amount of public investment regardless of the taxation policy. The government should use taxation to concentrate individuals in the region in order to utilize scale economies. To control regional agglomeration, the government should use taxation, not the public investment.

Keywords: Agglomeration; Redistribution; Public investment (search for similar items in EconPapers)
JEL-codes: D3 R0 (search for similar items in EconPapers)
Date: 2012-07-04
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