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Spillover effects of local fiscal policy

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  • Paul Hettler

Abstract

Cities and suburbs share a special interrelationship—they are both dependent on one another yet, simultaneously, in competition with one another. Because of their impact on the regional land and labor markets, fiscal policies undertaken in the central city can have effects that extend beyond its political jurisdiction. An understanding of these potential spillovers is critical in the design of regional economic policy. With no such understanding, one municipality's policies could lead to undesirable consequences for the metropolitan area as a whole, such as increasing suburban sprawl. This paper develops a general equilibrium model of an inter- and intrametropolitan location that allows the examination of such effects. The model can be used to determine what types of policies best serve the metropolitan area. Copyright International Atlantic Economic Society 2001

Suggested Citation

  • Paul Hettler, 2001. "Spillover effects of local fiscal policy," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 29(4), pages 406-419, December.
    • Handle: RePEc:kap:atlecj:v:29:y:2001:i:4:p:406-419
    DOI: 10.1007/BF02299330
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    1. Graham Crampton, 1996. "Local Government Structure and Urban Residential Location," Urban Studies, Urban Studies Journal Limited, vol. 33(7), pages 1061-1076, August.
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    3. Gyourko, Joseph & Tracy, Joseph, 1989. "The Importance of Local Fiscal Conditions in Analyzing Local Labor Markets," Journal of Political Economy, University of Chicago Press, vol. 97(5), pages 1208-1231, October.
    4. Beeson, Patricia E., 1991. "Amenities and regional differences in returns to worker characteristics," Journal of Urban Economics, Elsevier, vol. 30(2), pages 224-241, September.
    5. Hoyt, William H., 1992. "Market power of large cities and policy differences in metropolitan areas," Regional Science and Urban Economics, Elsevier, vol. 22(4), pages 539-558, November.
    6. Blomquist, Glenn C & Berger, Mark C & Hoehn, John P, 1988. "New Estimates of Quality of Life in Urban Areas," American Economic Review, American Economic Association, vol. 78(1), pages 89-107, March.
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    Cited by:

    1. Paul Hettler, 2002. "Central city fiscal conditions and MSA population distribution," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 8(4), pages 334-347, November.

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