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Advance Production Duopolies and Posted Prices or Market-Clearing Prices

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  • Robin Boadway
  • Katherine Cuff
  • Nicolas Marceau

Abstract

A two-region economy consists of a given but different number of immobile workers in each region, and a given number of mobile firms. Firms create jobs where they locate, but there is frictional unemployment. Two sorts of agglomeration effects arise: those from economies of scale in matching, and those from production economies external to the firm. Regions may either be part of a unitary state in which case all regional policies are decided by the central government, or they may be part of a federal state in which case some policies are determined by the regional governments. We characterize the resource allocations in both a unitary and a federal state, and identify the set of instruments that are required to replicate the social optimum in each state.

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Bibliographic Info

Paper provided by McMaster University in its series Department of Economics Working Papers with number 2002-08.

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Length: 28 pages
Date of creation: Aug 2002
Date of revision:
Handle: RePEc:mcm:deptwp:2002-08

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  1. Andreas Haufler & Ian Wooton, . "Country Size and Tax Competition for Foreign Direct Investment," Working Papers, Business School - Economics, University of Glasgow 9702, Business School - Economics, University of Glasgow.
  2. Robin Boadway & Michael Keen, 1999. "Redistribution," Working Papers, Queen's University, Department of Economics 983, Queen's University, Department of Economics.
  3. Ludema, Rodney D & Wooton, Ian, 1998. "Economic Geography and the Fiscal Effects of Regional Integration," CEPR Discussion Papers, C.E.P.R. Discussion Papers 1822, C.E.P.R. Discussion Papers.
  4. Wilson, John Douglas, 1991. "Tax competition with interregional differences in factor endowments," Regional Science and Urban Economics, Elsevier, Elsevier, vol. 21(3), pages 423-451, November.
  5. Kind, Hans Jarle & Schjelderup, Guttorm & Ulltveit-Moe, Karen-Helene, 1999. "Competing for Capital in a 'Lumpy' World," CEPR Discussion Papers, C.E.P.R. Discussion Papers 2188, C.E.P.R. Discussion Papers.
  6. Boadway, Robin & Cuff, Katherine & Marceau, Nicolas, 2003. "Redistribution and employment policies with endogenous unemployment," Journal of Public Economics, Elsevier, Elsevier, vol. 87(11), pages 2407-2430, October.
  7. Bucovetsky, S., 1991. "Asymmetric tax competition," Journal of Urban Economics, Elsevier, vol. 30(2), pages 167-181, September.
  8. Wilson, John Douglas, 1999. "Theories of Tax Competition," National Tax Journal, National Tax Association, vol. 52(n. 2), pages 269-304, June.
  9. Robin Boadway & Katherine Cuff & Nicolas Marceau, 2002. "Inter-Jurisdictional Competition for Firms," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 43(3), pages 761-782, August.
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