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Fiscal Competition in Space and Time

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  • David Wildasin

    (University of Kentucky)

Abstract

This paper analyzes fiscal competition among numerous spatially- separated jurisdictions in an explicitly dynamic framework. The degree of factor mobility between jurisdictions is imperfect because it is costly and time-consuming to adjust factor stocks. Even if it is harmful in the long run, taxation of mobile factors redistribute income in favor of the owners of immobile resources in the short run. The optimal tax on mobile factors is lower, the faster the speed with which factors adjust to fiscal policy. Anticipated taxes are less beneficial than those that can be imposed unexpectedly.

Suggested Citation

  • David Wildasin, 2001. "Fiscal Competition in Space and Time," Public Economics 0112004, University Library of Munich, Germany.
    • Handle: RePEc:wpa:wuwppe:0112004
    Note: Type of Document - ; prepared on TeX; figures: request from author
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    More about this item

    Keywords

    fiscal competition tax competition;

    JEL classification:

    • D6 - Microeconomics - - Welfare Economics
    • D7 - Microeconomics - - Analysis of Collective Decision-Making
    • H - Public Economics

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