IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Log in (now much improved!) to save this paper

Fiscal Integration with Internal Trade: Quantifying the Effects of Equalizing Transfers

  • Trevor Tombe

    (University of Calgary)

  • Jennifer Winter

    (University of Calgary)

Financial transfers between regions of a country are ubiquitous, though little is known about how they interact with trade. We show trade is crucial for evaluating the welfare and productivity effect of transfers. Transfers also affect the spatial and sectoral distribution of economic activity. To do this, we augment a rich quantitative trade model to include endogenous fiscal transfers, and calibrate the model using detailed data for trade and financial flows within Canada. Transfers significantly increase welfare, productivity, and specialization in downstream (final goods) sectors in recipient regions; the reverse is true in contributor regions. Fiscal transfers also affect gains from trade and the effects of trade policy changes. We end with an application to increased fiscal integration among Eurozone countries.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://econ.ucalgary.ca/sites/econ.ucalgary.ca.manageprofile/files/unitis/publications/1-4681118/tombewinter2016.pdf
Download Restriction: no

Paper provided by Department of Economics, University of Calgary in its series Working Papers with number 2013-28.

as
in new window

Length:
Date of creation: 25 Jan 2016
Date of revision: 25 Jan 2016
Handle: RePEc:clg:wpaper:2013-28
Contact details of provider: Postal:
2500 University Drive N.W., Calgary, Alberta, T2N 1N4

Phone: (403) 220-5857
Fax: (403) 282-5262
Web page: http://econ.ucalgary.ca/

More information through EDIRC

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Aguayo-Tellez, Ernesto & Muendler, Marc-Andreas & Poole, Jennifer Pamela, 2008. "Globalization and Formal Sector Migration in Brazil," Working Paper Series RP2008/22, World Institute for Development Economic Research (UNU-WIDER).
  2. De Sousa, José & Mayer, Thierry & Zignago, Soledad, 2012. "Market Access in Global and Regional Trade," CEPREMAP Working Papers (Docweb) 1201, CEPREMAP.
  3. Sandra PONCET, 2002. "A Fragmented China. Measure and Determinants of Chinese Domestic Market Disintegration," Working Papers 200221, CERDI.
  4. Alvarez, Fernando & Lucas, Robert Jr., 2007. "General equilibrium analysis of the Eaton-Kortum model of international trade," Journal of Monetary Economics, Elsevier, vol. 54(6), pages 1726-1768, September.
  5. Ina Simonovska & Michael Waugh, 2011. "The Elasticity of Trade: Estimates and Evidence," Working Papers 112, University of California, Davis, Department of Economics.
  6. Chen, Natalie, 2002. "Intra-national versus International Trade in the European Union: Why do National Borders Matter?," CEPR Discussion Papers 3407, C.E.P.R. Discussion Papers.
  7. Dennis Novy, 2013. "Gravity redux: measuring international trade costs with panel data," LSE Research Online Documents on Economics 59308, London School of Economics and Political Science, LSE Library.
  8. Treb Allen & Costas Arkolakis, 2013. "Trade and the Topography of the Spatial Economy," NBER Working Papers 19181, National Bureau of Economic Research, Inc.
  9. A. Kerem Coşar & Pablo D. Fajgelbaum, 2013. "Internal Geography, International Trade, and Regional Specialization," NBER Working Papers 19697, National Bureau of Economic Research, Inc.
  10. Pierre-Daniel G. Sarte & Esteban Rossi-Hansberg & Fernando Parro & Lorenzo Caliendo, 2013. "The impact of regional and sectoral productivity changes on the U.S. economy," Working Paper 13-14, Federal Reserve Bank of Richmond.
  11. John F. Helliwell & Geneviève Verdier, 2001. "Measuring internal trade distances: a new method applied to estimate provincial border effects in Canada," Canadian Journal of Economics, Canadian Economics Association, vol. 34(4), pages 1024-1041, November.
  12. Jonathan Eaton & Samuel Kortum, 2000. "Trade in Capital Goods," Boston University - Department of Economics - The Institute for Economic Development Working Papers Series dp-109, Boston University - Department of Economics.
  13. Russell Hillberry & David Hummels, 2002. "Intra-national Home Bias: Some Explanations," NBER Working Papers 9022, National Bureau of Economic Research, Inc.
  14. Stephen J. Redding, 2012. "Goods Trade, Factor Mobility and Welfare," CEP Discussion Papers dp1140, Centre for Economic Performance, LSE.
  15. Trevor Tombe, 2012. "The Missing Food Problem," Working Papers tt0060, Wilfrid Laurier University, Department of Economics, revised 2012.
  16. Brian McCaig & Nina Pavcnik, 2014. "Export Markets and Labor Allocation in a Low-income Country," NBER Working Papers 20455, National Bureau of Economic Research, Inc.
  17. David Atkin & Dave Donaldson, 2015. "Who's Getting Globalized? The Size and Implications of Intra-national Trade Costs," NBER Working Papers 21439, National Bureau of Economic Research, Inc.
  18. Volker Nitsch, 2000. "National borders and international trade: evidence from the European Union," Canadian Journal of Economics, Canadian Economics Association, vol. 33(4), pages 1091-1105, November.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:clg:wpaper:2013-28. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (May Ives)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.