EconPapers    
Economics at your fingertips  
 

Public Debt and Economic Geography

Federico Trionfetti

Working Papers from HAL

Abstract: This paper studies the consequences of debt policies on the spatial distribution of output in a two-country model. It departs from the usual set up of local public finance by relaxing the assumption of balanced budget. Further, to single out the pure effect of debt the paper 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 paper also shows that a high debt country or a fast debt reducing country is a weaker player in the tax competition game. Lastly, tax harmonisation does not necessarily reduce migration flows.

Keywords: Taxation; Economic Integration; New Economic Geography (search for similar items in EconPapers)
Date: 2012-09
Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-00793388
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
https://halshs.archives-ouvertes.fr/halshs-00793388/document (application/pdf)

Related works:
Journal Article: Public Debt and Economic Geography (2015) Downloads
Working Paper: Public Debt and Economic Geography (2015)
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:wpaper:halshs-00793388

Access Statistics for this paper

More papers in Working Papers from HAL
Bibliographic data for series maintained by CCSD ().

 
Page updated 2019-12-13
Handle: RePEc:hal:wpaper:halshs-00793388