A Regional Equilibrium Model of the United States: Tax Effects on Factor Movements and Regional Production

William Morgan, John Mutti and Mark Patridge

The Review of Economics and Statistics, 1989, vol. 71, issue 4, 626-35

Abstract: A six-region general equilibrium model of the United States is used to assess the potential long-run effects of state-local and federal tax policies on output and the allocation of factors across regions and sectors. The nonuniform structure of state-local taxes and their interaction with federal taxes means that regional output is affected quite differently than would be projected solely on the basis of changing average regional tax burdens. The study provides a useful indication of conceptual and empirical issues that must be considered in further regional modeling efforts, issues which do not arise in closed-economy national models. Copyright 1989 by MIT Press.

Date: 1989
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