Fiscal and growth spillovers in large urban areas

Albert Solé Ollé () and Elisabet Viladecans Marsal ()
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Albert Solé Ollé: Institut d'Economia de Barcelona (IEB); Universitat de Barcelona (UB)
Elisabet Viladecans Marsal: Institut d'Economia de Barcelona (IEB); Universitat de Barcelona (UB)
Authors registered in the RePEc Author Service: Elisabet Viladecans-Marsal

No 2003/1, Working Papers from Institut d'Economia de Barcelona (IEB)

Abstract: This paper looks for empirical evidence on spillovers occurring between central cities and their suburbs, both on the fiscal side and on the growth of population and output. To test these hypotheses we specify a dynamic model with population and output both in the central city and in the suburbs as endogenous variables and with fiscal variables in the central city and in the suburbs as covariates. The model is estimated with a panel of data of twenty-eight metropolitan areas in Spain for the period 1992-2001.The main findings are that the capital stock in the central city promotes growth both in the city and in the suburbs. Also, higher growth in the central city translates into higher long run growth in the suburbs. These results are indicative of the potential welfare gains of both, concentrating financial resources in the central city, and of the implementation of existing proposals of metropolitan consolidation.

Keywords: Cities; Local government; Spillovers (search for similar items in EconPapers)
JEL-codes: H73 R38 (search for similar items in EconPapers)
Pages: 39 pages
Date: 2003
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