EconPapers    
Economics at your fingertips  
 

Public Debt and Economic Geography

Federico Trionfetti

Post-Print from HAL

Abstract: This article studies the consequences of debt policies on the spatial distribution of output in a two-country model. It departs from the usual setup of local public finance by relaxing the assumption of balanced budget. Further, to single out the pure effect of debt, the article eliminates effects coming from tax and expenditure policies by assuming them exogenous and identical between countries except for the timing of taxation. Expected taxation rather than current tax levels motivates migration. Starting from an initial spatial configuration, be it Core-Periphery or symmetric equilibrium, the analysis identifies the critical thresholds of divergence or convergence of debt ratios which break the initial configuration. The article also shows that a high-debt country or a fast debt reducing country is a weaker player in the tax competition game. Finally, tax harmonization does not necessarily reduce migration flows.

Keywords: economic integration; new economic geography; Taxation (search for similar items in EconPapers)
Date: 2015-01
Note: View the original document on HAL open archive server: https://hal-amu.archives-ouvertes.fr/hal-01457313
References: Add references at CitEc
Citations: View citations in EconPapers (2) Track citations by RSS feed

Published in International Regional Science Review, SAGE Publications, 2015, 38 (1), pp.92--113. ⟨10.1177/0160017612462873⟩

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Journal Article: Public Debt and Economic Geography (2015) Downloads
Working Paper: Public Debt and Economic Geography (2012) Downloads
Working Paper: Public Debt and Economic Geography (2012) 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:hal:journl:hal-01457313

DOI: 10.1177/0160017612462873

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().

 
Page updated 2022-01-15
Handle: RePEc:hal:journl:hal-01457313