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Fitness Landscape and Tax Planning: NK Model for Fiscal Federalism

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  • Marisa Faggini
  • Anna Parziale

Abstract

This paper rises from the idea to highlight how traditional models of Fiscal Federalism are not be able to capture adequately the behavioral dynamics of economic systems. We stress the innovative aspects of complexity theory and the premises on which to base the analysis of Fiscal Federalism in this perspective. For this purpose, we consider Fiscal Federalism as a network of economic relationships between different complex adaptive and co-evolving systems, the jurisdictions, linked by strong interdependencies. We will proceed to model a landscape in which co-evolving jurisdictions have to find the optimal path to organize the local tax planning and to optimize their local economy.

Suggested Citation

  • Marisa Faggini & Anna Parziale, 2017. "Fitness Landscape and Tax Planning: NK Model for Fiscal Federalism," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 9(7), pages 14-31, July.
    • Handle: RePEc:ibn:ijefaa:v:9:y:2017:i:7:p:14-31
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    References listed on IDEAS

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    6. Wallace Oates, 2005. "Toward A Second-Generation Theory of Fiscal Federalism," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 12(4), pages 349-373, August.
    7. Koen Frenken, 2006. "Technological innovation and complexity theory," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 15(2), pages 137-155.
    8. Paul Bernd Spahn, 2006. "Contract Federalism," Chapters, in: Ehtisham Ahmad & Giorgio Brosio (ed.), Handbook of Fiscal Federalism, chapter 7, Edward Elgar Publishing.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    fiscal decentralization; coevolution; fitness landscape; tax planning;
    All these keywords.

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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