Vertical externalities with lump-sum taxes: how much difference does unemployment make?

Artikel

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 a unitary and in a federal state. Our findings indicate that decentralising spending responsability on public inputs in the presence of unemployment allows output to be closer to the first best level. Moreover, we describe the inability of the federal government, behaving as a Stackelberg leader, to replicate the unitary outcome, unless there are new policy instruments at government's disposal.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Journal: European Journal of Government and Economics (EJGE) ; ISSN: 2254-7088 ; Volume: 3 ; Year: 2014 ; Issue: 1 ; Pages: 75-87 ; A Coruña: Universidade da Coruña

Classification and Topics

• Classification: Wirtschaft
• Subject: Public inputs ; unemployment ; vertical externalities

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Martinez-Lopez, Diego ; Sjongren, Tomas
• Event: Veröffentlichung
• (who): Universidade da Coruña
• (where): A Coruña
• (when): 2014

Further information

• DOI: doi:10.17979/ejge.2014.3.1.4298
• Handle: http://hdl.handle.net/10419/217729
• Last update: 10.03.2025, 11:42 AM CET