Fiscal competition in space and time: an endogenous-growth approach

Arbeitspapier

Is tax competition good for economic growth? The paper addresses this question by means of a simple model of endogenous growth. There are many small jurisdictions in a large federation and individual governments benevolently maximise the welfare of immobile residents. Investment is costly: Quadratic installation and de-installation costs limit the mobility of capital. The paper looks at optimal taxation and long-run growth. In particular, the effects of variations in the cost parameter on economic growth and taxation are considered. It is shown that balanced endogenous growth paths do not always exist and effects of changes in installation costs are ambiguous.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 2048

Classification and Topics

• Classification: Wirtschaft ; Taxation and Subsidies: Efficiency; Optimal Taxation ; State and Local Budget and Expenditures ; One, Two, and Multisector Growth Models
• Subject: Steuerwettbewerb ; Neue Wachstumstheorie ; Optimale Besteuerung ; Gleichgewichtiges Wachstum ; Direktinvestition ; Kosten ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Becker, Daniel Thomas ; Rauscher, Michael
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2007

Further information

• Handle: http://hdl.handle.net/10419/26093
• Last update: 10.03.2025, 11:44 AM CET