Vertical externalities with lump-sum taxes: how much difference does unemployment make?
This paper analyses how the existence of unemployment affects the conventional approach to vertical externalities. We discuss the optimality rule for the provision of public inputs both in an unitary and a federal country. Our findings show that decentralizing the spending responsability on public inputs can bring its optimality rule closer to the production efficiency condition. Moreover, we describe the inability of the federal government, behaving as Stackelberg leader, to replicate the unitary outcome, unless to have new policy instruments at government’s disposal.
|Date of creation:||2012|
|Date of revision:|
|Contact details of provider:|| Postal: Carrer del Tinent Coronel Valenzuela 1-11, 08034 Barcelona|
Phone: 93 403 46 46
Fax: 93 403 98 32
Web page: http://www.ieb.ub.edu
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.:
- Robin Boadway & Jean-Francois Tremblay, 2005.
"A Theory of Vertical Fiscal Imbalance,"
2006-04, University of Kentucky, Institute for Federalism and Intergovernmental Relations.
- Diego Martínez, 2008.
"Optimal Federal Taxes with Public Inputs,"
FinanzArchiv: Public Finance Analysis,
Mohr Siebeck, Tübingen, vol. 64(4), pages 422-433, December.
- Robin Boadway & Jean-François Tremblay, 2006. "A Theory of Fiscal Imbalance," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 62(1), pages 1-27, March.
- Diego Martinez & A. Sanchez, 2010. "A note on the optimal level of public inputs," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 34(3), pages 363-369, March.
- Christos Kotsogiannis & Diego Martinez, 2007.
"Ad Valorem Taxes and the Fiscal Gap in Federations,"
0703, Exeter University, Department of Economics.
- Kotsogiannis, Christos & Martinez, Diego, 2008. "Ad valorem taxes and the fiscal gap in federations," Economics Letters, Elsevier, vol. 99(3), pages 431-434, June.
- Martinez, Diego & Sjögren, Tomas, 2013.
"Can Labor Market Imperfections Cause Overprovision of Public Inputs?,"
Umeå Economic Studies
858, Umeå University, Department of Economics.
- Diego Martinez & Tomas Sjögren, 2009. "Can Labor Market Imperfections Cause Overprovision of Public Inputs?," Working Papers 09.13, Universidad Pablo de Olavide, Department of Economics.
- Michael Keen, 1998.
"Vertical Tax Externalities in the Theory of Fiscal Federalism,"
IMF Staff Papers,
Palgrave Macmillan, vol. 45(3), pages 454-485, September.
- Michael Keen, 1997. "Vertical Tax Externalities in the Theory of Fiscal Federalism," IMF Working Papers 97/173, International Monetary Fund.
- Ogawa, Hikaru & Sato, Yasuhiro & Tamai, Toshiki, 2006. "A note on unemployment and capital tax competition," Journal of Urban Economics, Elsevier, vol. 60(2), pages 350-356, September.
- Dahlby, Bev & Wilson, Leonard S., 2003. "Vertical fiscal externalities in a federation," Journal of Public Economics, Elsevier, vol. 87(5-6), pages 917-930, May.
- Motohiro Sato, 2000. "Fiscal Externalities and Efficient Transfers in a Federation," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 7(2), pages 119-139, March.
When requesting a correction, please mention this item's handle: RePEc:ieb:wpaper:2012/6/doc2012-25. 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: ()
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.