IDEAS home Printed from https://ideas.repec.org/a/mul/jb33yl/doi10.1428-75298y2013i3p357-386.html
   My bibliography  Save this article

Taxation, Public Expenditures and Agglomeration

Author

Listed:
  • Pasquale Commendatore
  • Ingrid Kubin

Abstract

Recently, issues of international taxation have also been analysed from a New Economic Geographyperspective. These discussions show that adding agglomerative forces can change the results considerably.In our paper, we introduce a public sector into a Footloose Capital model: Capital income is taxed accordingto the residence principle and any tax revenue is spent for providing a public commodity. Thus,public policy changes the sectoral split of total expenditures, which is central for determining internationalfactor rewards and thus for factor mobility.We modeled this factor mobility process - along the lines of a replicator dynamics - in discrete timeand studied its local and global properties. We showed that multiple equilibria are possible, involvingcyclical and chaotic attractors; and that the basins of attraction may exhibit a highly complex structure. Inthat environment, the long run outcome of the dynamics process may depended highly sensitive to initialconditions and/or parameters. Public policy trying to attract industrial capital to one country may triggera dynamic process actually leading to agglomeration in the other country.

Suggested Citation

  • Pasquale Commendatore & Ingrid Kubin, 2013. "Taxation, Public Expenditures and Agglomeration," Economia politica, Società editrice il Mulino, issue 3, pages 357-386.
  • Handle: RePEc:mul:jb33yl:doi:10.1428/75298:y:2013:i:3:p:357-386
    as

    Download full text from publisher

    File URL: https://www.rivisteweb.it/download/article/10.1428/75298
    Download Restriction: Access to full text is restricted to subscribers

    File URL: https://www.rivisteweb.it/doi/10.1428/75298
    Download Restriction: no
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Pasquale Commendatore & Ingrid Kubin, 2016. "Source versus residence: A comparison from a new economic geography perspective," Papers in Regional Science, Wiley Blackwell, vol. 95(2), pages 201-222, June.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mul:jb33yl:doi:10.1428/75298:y:2013:i:3:p:357-386. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://www.rivisteweb.it/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.