Spillover effects of local fiscal policy

Paul Hettler

Atlantic Economic Journal, 2001, vol. 29, issue 4, 406-419

Abstract: Cities and suburbs share a special interrelationship—they are both dependent on one another yet, simultaneously, in competition with one another. Because of their impact on the regional land and labor markets, fiscal policies undertaken in the central city can have effects that extend beyond its political jurisdiction. An understanding of these potential spillovers is critical in the design of regional economic policy. With no such understanding, one municipality's policies could lead to undesirable consequences for the metropolitan area as a whole, such as increasing suburban sprawl. This paper develops a general equilibrium model of an inter- and intrametropolitan location that allows the examination of such effects. The model can be used to determine what types of policies best serve the metropolitan area. Copyright International Atlantic Economic Society 2001

Date: 2001
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Persistent link: https://EconPapers.repec.org/RePEc:kap:atlecj:v:29:y:2001:i:4:p:406-419

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DOI: 10.1007/BF02299330

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