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Fiscal Competition for Imperfectly-Mobile Labor and Capital: A Comparative Dynamic Analysis

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  • David E. Wildasin

Abstract

Interjurisdictional flows of imperfectly-mobile migrants, investment, and other productive resources result in the costly dynamic adjustment of resource stocks. This paper investigates the comparative dynamics of adjustment to changes in local fiscal policy with two imperfectly mobile productive resources. The intertemporal adjustments for both resources depend on complementarity/substitutability in production and the adjustment cost technologies for each, implying that the evaluation of the fiscal treatment of one resource must account for the simultaneous adjustment of both.

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File URL: http://www.cesifo-group.de/portal/page/portal/DocBase_Content/WP/WP-CESifo_Working_Papers/wp-cesifo-2009/wp-cesifo-2009-09/cesifo1_wp2808.pdf
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Bibliographic Info

Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 2808.

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Date of creation: 2009
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Handle: RePEc:ces:ceswps:_2808

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Keywords: fiscal competition; labor mobility; capital mobility; comparative dynamics;

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Cited by:
  1. Andreas Haufler & Christoph Lülfesmann, 2013. "Reforming an Asymmetric Union: On the Virtues of Dual Tier Capital Taxation," CESifo Working Paper Series 4076, CESifo Group Munich.
  2. Enlinson Mattos & Ricardo Politi, 2014. "Pro-poor tax policy and yardstick competition: a spatial investigation for VAT relief on food in Brazil," The Annals of Regional Science, Springer, vol. 52(1), pages 279-307, January.
  3. Han, Yutao & Pieretti, Patrice & Zou, Benteng, 2013. "An extension of the home-attachment criteria under dynamic tax competition," Economics Letters, Elsevier, vol. 121(3), pages 508-510.
  4. Yutao Han & Patrice Pieretti & Benteng Zou, 2013. "The Dynamics of the Location of Firms – A Revisit of Home-Attachment under Tax Competition," CREA Discussion Paper Series 13-15, Center for Research in Economic Analysis, University of Luxembourg.

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