Efficiency of Local Policy Programmes under Free Migration

Hannu Laurila
Additional contact information
Hannu Laurila: School of Management, University of Tampere

No 759, Working Papers from Tampere University, Faculty of Management and Business, Economics

Abstract: A Neo-Keynesian macroeconomic model is constructed to examine the efficiency of a local tax-transfer programme under free migration. An application of the Adaptive Expectations Hypothesis is used todescribe people’s perceptions of the programme. It is shown that fair programmes with no effects on localwelfare have no effect on migration either thus being efficient in the long term. In the short term, falseperceptions concerning the repayments make the programme unfair. Migration enforces the excess burden ofan unfair programme, but gradual correction of the perceptions eventually mitigates the effects to zero.

Keywords: AEH; fair/unfair policy plan; tax competition (search for similar items in EconPapers)
JEL-codes: F22 H73 (search for similar items in EconPapers)
Pages: 17 pages
Date: 2007-08
References: Add references at CitEc
Citations:

Downloads: (external link)
http://urn.fi/urn:isbn:978-951-44-7047-9 First version, 2007 (application/pdf)

Related works:
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:tam:wpaper:0759

Access Statistics for this paper

More papers in Working Papers from Tampere University, Faculty of Management and Business, Economics Contact information at EDIRC.
Bibliographic data for series maintained by Sami Remes ().