 TAX COMPETITION BETWEEN REGIONAL GOVERNMENTS AND NATIONAL AND INTERREGIONAL ECONOMIC GROWTHSociology and Social Work Review, 2019, vol. 3, issue 2, 6-31 Abstract: The purpose of this study is to examine a well-mentioned but rarely properly examined issue related to interregional tax competition and regional and national economic growth. We build an inter-regional neoclassical economic growth with regional governments’ competition in taxation. We extend Solow-Uzawa’s neoclassical growth model to any number of regions. The model treats wealth/capital accumulation, economic structures, factor distributions, interregional population distribution, amenity, regions’ tax rates as endogenous variables. Firms’ behavior is described by profit maximization, households’ behavior by utility maximization, markets by perfect competition, and regional governments’ behavior by choosing tax rates to maximize utility. We identify the existence of an equilibrium point and conduct comparative analysis to show how changes in, for instance, the utility elasticity of public goods, technologies, propensity to consume housing, and propensity to save, affect the long-run economic growth and structure. Keywords: tax competition; Nash equilibrium; multi-region economic dynamics; factor distribution; regional disparities in wealth and income; wealth accumulation; amenity. (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:edr:sswrgl:v:3:y:2019:i:2:p:6-31 Access Statistics for this article Sociology and Social Work Review is currently edited by Serban Ionut More articles in Sociology and Social Work Review from International Society for projects in Education and Research |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.