Modeling positive inter-jurisdictional public spending spillovers
AbstractThis paper builds spatial microfoundations for the functional forms used in the analysis of inter-jurisdictional public spending spillovers. It introduces a symmetric bilateral model that distinguishes between three stages: production of multiple public inputs (intermediary goods), production of multiple public outputs (final goods) including asymmetries and non-additive aggregations, and consumption of the public outputs with asymmetries and preferences for variety. The model is characterized by seven modeling features, and the paper demonstrates how these features are combined in the relevant literature. The paper identifies sufficient conditions for the different combinations of the features to be isomorphic. Additionally, it analyzes which microfoundations for the inter-jurisdictional spillovers lead to asymmetrically structured demands for public spending.
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Bibliographic InfoPaper provided by Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies in its series Working Papers IES with number 2012/16.
Date of creation: Jun 2012
Date of revision: Jun 2012
spillover; externality; complementarity; weak-link; local public goods;
Find related papers by JEL classification:
- H4 - Public Economics - - Publicly Provided Goods
- H7 - Public Economics - - State and Local Government; Intergovernmental Relations
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-06-25 (All new papers)
- NEP-GEO-2012-06-25 (Economic Geography)
- NEP-URE-2012-06-25 (Urban & Real Estate Economics)
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