EconPapers    
Economics at your fingertips  
 

Regional Risksharing and Redistribution in the German Federation

Ralf Hepp () and Juergen von Hagen ()

No 2662, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We provide empirical estimates of the risksharing and redistributive properties of fiscal equalization among the states of the German federation. Fiscal equalization serves as a mechanism to insure state budgets against asymmetric revenue shocks, but provides almost no insurance against regional income shocks. Equalization responds only weakly to income differentials but strongly to tax revenue differentials across states. A further result is that the correlation of state tax revenues with state GDPs has declined over time. This may reflect a weakening in state tax efforts in response to the adverse incentive effects of fiscal equalization.

Keywords: Fiscal Federalism; Monetary Union; Regional Risk-Sharing (search for similar items in EconPapers)
JEL-codes: E42 E63 F33 F42 (search for similar items in EconPapers)
Date: 2001-01
References: Add references at CitEc
Citations: View citations in EconPapers (17) Track citations by RSS feed

Downloads: (external link)
http://www.cepr.org/active/publications/discussion_papers/dp.php?dpno=2662 (application/pdf)
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 subscribers@cepr.org

Related works:
Working Paper: Regional risksharing and redistribution in the German federation (2000) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:2662

Ordering information: This working paper can be ordered from
http://www.cepr.org/ ... ers/dp.php?dpno=2662

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 ().

 
Page updated 2020-02-06
Handle: RePEc:cpr:ceprdp:2662