Fiscal Transfers in the Spatial Economy
Tobias Seidel and
Authors registered in the RePEc Author Service: Jens Suedekum ()
No 12875, CEPR Discussion Papers from C.E.P.R. Discussion Papers
Many countries operate pronounced fiscal equalization schemes that shift tax revenue across jurisdictions. We use a general equilibrium model with multiple asymmetric regions, costly trade and labor mobility to carve out the aggregate implications of this policy. Calibrating the model for Germany, we find that it indeed delivers smaller spatial economic disparities across regions. This comes at the cost of lower national output, however, because activity is diverted away from core cities and towards remote areas with low productivity. But despite this output loss, fiscal transfers may still raise national welfare, because they effectively countervail over-congestion in large cities.
Keywords: Fiscal equalization; migration; regional transfers; spatial economics (search for similar items in EconPapers)
JEL-codes: F15 R11 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eur, nep-geo and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12) Track citations by RSS feed
Downloads: (external link)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at email@example.com
Journal Article: Fiscal Transfers in the Spatial Economy (2021)
Working Paper: Fiscal transfers in the spatial economy (2019)
Working Paper: Fiscal Transfers in the Spatial Economy (2018)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:12875
Ordering information: This working paper can be ordered from
http://www.cepr.org/ ... rs/dp.php?dpno=12875
Access Statistics for this paper
More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().