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Fiscal and growth spillovers in large urban areas

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Author Info
Albert Solé Ollé () (Institut d'Economia de Barcelona (IEB); Universitat de Barcelona (UB))
Elisabet Viladecans Marsal () (Institut d'Economia de Barcelona (IEB); Universitat de Barcelona (UB))

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Abstract

This paper looks for empirical evidence on spillovers occurring between central cities and their suburbs, both on the fiscal side and on the growth of population and output. To test these hypotheses we specify a dynamic model with population and output both in the central city and in the suburbs as endogenous variables and with fiscal variables in the central city and in the suburbs as covariates. The model is estimated with a panel of data of twenty-eight metropolitan areas in Spain for the period 1992-2001.The main findings are that the capital stock in the central city promotes growth both in the city and in the suburbs. Also, higher growth in the central city translates into higher long run growth in the suburbs. These results are indicative of the potential welfare gains of both, concentrating financial resources in the central city, and of the implementation of existing proposals of metropolitan consolidation.

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Publisher Info
Paper provided by Institut d'Economia de Barcelona (IEB) in its series Working Papers with number 2003/1.

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Length: 39 pages
Date of creation: 2003
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Handle: RePEc:ieb:wpaper:226362art128

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Related research
Keywords: Cities; Local government; Spillovers;

Find related papers by JEL classification:
H73 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Interjurisdictional Differentials and Their Effects
R38 - Urban, Rural, and Regional Economics - - Production Analysis and Firm Location - - - Government Policies; Regulatory Policies

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