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Fiscal Externalities Over Long Horizons

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  • Arman Mansoorian

    (York University, Canada)

Abstract

The fiscal externality model is extended to an infinite horizon setting with stochastic technologies. With imperfect population mobility some gains from risk sharing are not exploited by the regional authorities. Nevertheless, regional authorities who care about their reputation may be able to commit to an efficient allocation. For this to happen the present value of the gains from coordination to each region should be larger than the instantaneous costs to the region of making the transfers necessary for risk sharing. It is not possible to say a priori whether improvements in the degree of mobility will make this more likely.

Suggested Citation

  • Arman Mansoorian, 1996. "Fiscal Externalities Over Long Horizons," Working Papers 1996_04, York University, Department of Economics.
    • Handle: RePEc:yca:wpaper:1996_04
    as

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    File URL: ftp://dept.econ.yorku.ca/pub/working_papers/96-04.pdf
    File Function: First version, 1996
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    References listed on IDEAS

    as
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