EconPapers    
Economics at your fingertips  
 

The Henry George Theorem in a second-best world

Kristian Behrens (), Yoshitsugu Kanemoto and Yasusada Murata

No 8120, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: The Henry George Theorem (HGT), or the golden rule of local public finance, states that, in first-best economies, the fiscal surplus, defined as aggregate land rents minus aggregate losses from increasing returns to scale activities, is zero at optimal city sizes. We derive a general second-best HGT in which the fiscal surplus equals the excess burden, expressed as an extended Harberger formula. We then apply our theorem to various settings encompassing urban economics, the new economic geography and local public finance to investigate whether or not a single tax on land rents can raise enough revenue to cover aggregate losses from increasing returns to scale activities.

Keywords: Henry George Theorem; local public goods; monopolistic competition; optimal city size; second-best economies (search for similar items in EconPapers)
JEL-codes: D43 R12 R13 (search for similar items in EconPapers)
Date: 2010-11
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5) Track citations by RSS feed

Downloads: (external link)
http://www.cepr.org/active/publications/discussion_papers/dp.php?dpno=8120 (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:
Journal Article: The Henry George Theorem in a second-best world (2015) Downloads
Working Paper: The Henry George Theorem in a second-best world (2014) Downloads
Working Paper: The Henry George Theorem in A Second-Best World (2010) 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:8120

Ordering information: This working paper can be ordered from
http://www.cepr.org/ ... ers/dp.php?dpno=8120

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 2021-11-25
Handle: RePEc:cpr:ceprdp:8120