U.S. State and Local Fiscal Policies and Nonmetropolitan Area Economic Performance: A Spatial Equilibrium Analysis

Yihua Yu () and Dan Rickman

No 1101, Economics Working Paper Series from Oklahoma State University, Department of Economics and Legal Studies in Business

Abstract: Faced with declining economic bases, many nonmetropolitan areas increasingly have become concerned about their future economic viability. A crucial dimension of this concern is the balancing of the need to be cost-competitive in terms of lower taxes against the need for provision of valued government services. Using a spatial equilibrium framework, this study econometrically examines the nexus between U.S. state and local fiscal policies and nonmetropolitan county growth in earnings and housing rents during the 1990s. The results suggest that state and local fiscal characteristics were important location determinants. Some characteristics could be clearly identified as having dominant firm profit effects while numerous others were identified as having household amenity effects. In addition, fiscal policies appeared to be more important for economic growth of nonmetropolitan counties which were remote from metropolitan areas than they were for counties adjacent to metropolitan areas.

Keywords: Regional Fiscal Policies; Rural Development; Spatial Equilibrium; Economic Geography; Urban Economics (search for similar items in EconPapers)
JEL-codes: H30 R51 R58 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2011-05
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Citations: View citations in EconPapers (2)

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Related works:
Journal Article: US state and local fiscal policies and non-metropolitan area economic performance: A spatial equilibrium analysis (2013)
Working Paper: U.S. State and Local Fiscal Policies and Nonmetropolitan Area Economic Performance: A Spatial Equilibrium Analysis (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:okl:wpaper:1101

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