Fiscal Externalities with Imperfect Population Mobility The Three Region Case

Arman Mansoorian and Gordon Myers

Working Papers from York University, Department of Economics

Abstract: We consider a federation with three regions and an imperfectly mobile population. If in the Nash equilibrium one region makes transfers to the other two then the outcome is efficient. If in the Nash equilibrium two regions make transfers to a third region the outcome may be inefficient, because each of the transfer making regions ignores the effect of its transfers on migration out of the other rich region, and the resulting benefit to that region. Nevertheless, the Nash equilibrium is efficient when the two transfer making regions are strongly tied together by migration.

Keywords: Federation; Migration; Interregional Transfers; Efficiency. (search for similar items in EconPapers)
JEL-codes: H7 R5 (search for similar items in EconPapers)
Pages: 18 pages
Date: 1996-05
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ftp://dept.econ.yorku.ca/pub/working_papers/96-05.pdf First version, 1996

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Persistent link: https://EconPapers.repec.org/RePEc:yca:wpaper:1996_05

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