Arbeitspapier
Fiscal federalism and public inputs provision: vertical externalities matter
This paper studies the provision of public inputs in a federal system. A vertical tax externality is also considered in a simple general equilibrium model used to analyze the efficiency of equilibria under different scenarios. The results show that the state provision of public inputs may affect ambiguously federal tax revenues, depending on the vertical tax externality, amongst others issues. Moreover, it is proved that achieving a second best allocation is not straightforward for a federal government that plays as Stackelberg leader. At this point, the state’s reaction function becomes crucial when the design of vertical grants is restricted.
- Language
-
Englisch
- Bibliographic citation
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Series: ECB Working Paper ; No. 484
- Classification
-
Wirtschaft
- Subject
-
Fiscal federalism
productive public spending
vertical externality
Finanzbeziehungen
Finanzausgleich
Allokationseffizienz
Steuerwirkung
Theorie
- Event
-
Geistige Schöpfung
- (who)
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Martínez-López, Diego
- Event
-
Veröffentlichung
- (who)
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European Central Bank (ECB)
- (where)
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Frankfurt a. M.
- (when)
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2005
- Handle
- Last update
-
10.03.2025, 11:45 AM CET
Data provider
This object is provided by:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Martínez-López, Diego
- European Central Bank (ECB)
Time of origin
- 2005
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