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

Listed author(s):
  • David E. Wildasin

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

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Date of creation: 2009
Handle: RePEc:ces:ceswps:_2808
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  2. George R. Zodrow, 2007. "The Property Tax Incidence Debate and the Mix of State and Local Finance of Local Public Expenditures," CESifo Economic Studies, CESifo, vol. 53(4), pages 495-521, December.
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  7. Christopher L. House & Matthew D. Shapiro, 2008. "Temporary Investment Tax Incentives: Theory with Evidence from Bonus Depreciation," American Economic Review, American Economic Association, vol. 98(3), pages 737-768, June.
  8. Sorensen, Peter Birch, 2004. "International tax coordination: regionalism versus globalism," Journal of Public Economics, Elsevier, vol. 88(6), pages 1187-1214, June.
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  10. David E. Wildasin, 2000. "Fiscal Competition in Space and Time," CESifo Working Paper Series 370, CESifo Group Munich.
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  17. Becker, Daniel Thomas & Rauscher, Michael, 2007. "Fiscal competition in space and time: An endogenous-growth approach," Thuenen-Series of Applied Economic Theory 74, University of Rostock, Institute of Economics.
  18. Huizinga, H.P. & Nicodeme, G., 2004. "Are international deposits tax-driven?," Other publications TiSEM 661fe169-5543-452b-b6c9-e, Tilburg University, School of Economics and Management.
  19. Brueckner, Jan K. & Saavedra, Luz A., 2001. "Do Local Governments Engage in Strategic Property-Tax Competition?," National Tax Journal, National Tax Association, vol. 54(n. 2), pages 203-30, June.
  20. Oniki, Hajime, 1973. "Comparative dynamics (sensitivity analysis) in optimal control theory," Journal of Economic Theory, Elsevier, vol. 6(3), pages 265-283, June.
  21. Weingast, Barry R. & Wittman, Donald, 2008. "The Oxford Handbook of Political Economy," OUP Catalogue, Oxford University Press, number 9780199548477, December.
  22. Thiess Buettner, 2001. "Local Business Taxation and Competition for Capital: The Choice of the Tax Rate," CESifo Working Paper Series 440, CESifo Group Munich.
  23. Robert S. Chirinko & Daniel J. Wilson, 2006. "State investment tax incentives: what are the facts?," Working Paper Series 2006-49, Federal Reserve Bank of San Francisco.
  24. Michael P. Devereux & Rachel Griffith & Alexander Klemm, 2002. "Corporate income tax reforms and international tax competition," Economic Policy, CEPR;CES;MSH, vol. 17(35), pages 449-495, October.
  25. Conway, Karen Smith & Houtenville, Andrew J., 2001. "Elderly Migration and State Fiscal Policy: Evidence From the 1990 Census Migration Flows," National Tax Journal, National Tax Association, vol. 54(1), pages 103-124, March.
  26. David E. Wildasin, 2005. "Fiscal Competition," Working Papers 2005-05, University of Kentucky, Institute for Federalism and Intergovernmental Relations.
  27. Robert S. Chirinko & Daniel J. Wilson, 2007. "State Investment Tax Incentives: A Zero-Sum Game?," CESifo Working Paper Series 1895, CESifo Group Munich.
  28. Robin Boadway, 1979. "Long-run Tax Incidence: A Comparative Dynamic Approach," Review of Economic Studies, Oxford University Press, vol. 46(3), pages 505-511.
  29. Bradford, David F., 1978. "Factor prices may be constant but factor returns are not," Economics Letters, Elsevier, vol. 1(3), pages 199-203.
  30. Wilson, John Douglas & Wildasin, David E., 2004. "Capital tax competition: bane or boon," Journal of Public Economics, Elsevier, vol. 88(6), pages 1065-1091, June.
  31. Wilson John Douglas, 1995. "Mobile Labor, Multiple Tax Instruments, and Tax Competition," Journal of Urban Economics, Elsevier, vol. 38(3), pages 333-356, November.
  32. Decressin, Jörg & Fatás, Antonio, 1994. "Regional Labour Market Dynamics in Europe," CEPR Discussion Papers 1085, C.E.P.R. Discussion Papers.
  33. Thomas J. Nechyba, 2000. "Mobility, Targeting, and Private-School Vouchers," American Economic Review, American Economic Association, vol. 90(1), pages 130-146, March.
  34. Zodrow, George R. & Mieszkowski, Peter, 1986. "Pigou, Tiebout, property taxation, and the underprovision of local public goods," Journal of Urban Economics, Elsevier, vol. 19(3), pages 356-370, May.
  35. Hayashi, Fumio, 1982. "Tobin's Marginal q and Average q: A Neoclassical Interpretation," Econometrica, Econometric Society, vol. 50(1), pages 213-224, January.
  36. Nechyba, Thomas J, 1999. " School Finance Induced Migration and Stratification Patterns: The Impact of Private School Vouchers," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 1(1), pages 5-50.
  37. Conway, Karen Smith & Houtenville, Andrew J., 2001. "Elderly Migration and State Fiscal Policy: Evidence from the 1990 Census Migration Flows," National Tax Journal, National Tax Association, vol. 54(n. 1), pages 103-24, March.
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