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Fiscal Competition in Space and Time

  • David Wildasin

    (University of Kentucky)

This paper analyzes fiscal competition among numerous spatially- separated jurisdictions in an explicitly dynamic framework. The degree of factor mobility between jurisdictions is imperfect because it is costly and time-consuming to adjust factor stocks. Even if it is harmful in the long run, taxation of mobile factors redistribute income in favor of the owners of immobile resources in the short run. The optimal tax on mobile factors is lower, the faster the speed with which factors adjust to fiscal policy. Anticipated taxes are less beneficial than those that can be imposed unexpectedly.

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Paper provided by EconWPA in its series Public Economics with number 0112004.

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Date of creation: 10 Dec 2001
Date of revision:
Handle: RePEc:wpa:wuwppe:0112004
Note: Type of Document - ; prepared on TeX; figures: request from author
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