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Fiscal and growth spillovers in large urban areas

Author

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  • 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))

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.

Suggested Citation

  • Albert Solé Ollé & Elisabet Viladecans Marsal, 2003. "Fiscal and growth spillovers in large urban areas," Working Papers 2003/1, Institut d'Economia de Barcelona (IEB).
  • Handle: RePEc:ieb:wpaper:226362art128
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    File URL: http://ieb.ub.edu/aplicacio/fitxers/226362ART128.pdf
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    References listed on IDEAS

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    Cited by:

    1. Hansjörg Blöchliger & José Maria Pinero Campos, 2011. "Tax Competition Between Sub-Central Governments," OECD Economics Department Working Papers 872, OECD Publishing.

    More about this item

    Keywords

    Cities; Local government; Spillovers;

    JEL classification:

    • H73 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Interjurisdictional Differentials and Their Effects
    • R38 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Government Policy

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