Arbeitspapier
Why Cities Should not be Subsidized
The paper deals with the question of whether fiscal transfers re-ceived by cities can be justified by a higher cost of producing publicly provided goods. In the model, increasing the population density implies both a higher output per capita due to agglomeration economies and a higher cost of the publicly provided good due to congestion. It is shown that introducing fiscal transfers to be paid by the region with the lower population density will generally reduce welfare. This result is obtained since the city is already beyond the level of optimum agglomeration.
- Language
-
Englisch
- Bibliographic citation
-
Series: CESifo Working Paper ; No. 546
- Classification
-
Wirtschaft
- Subject
-
interjurisdictional transfers
congestion
publicly provided goods
- Event
-
Geistige Schöpfung
- (who)
-
Fenge, Robert
Meier, Volker
- Event
-
Veröffentlichung
- (who)
-
Center for Economic Studies and ifo Institute (CESifo)
- (where)
-
Munich
- (when)
-
2001
- Handle
- Last update
-
10.03.2025, 11:46 AM CET
Data provider
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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
- Fenge, Robert
- Meier, Volker
- Center for Economic Studies and ifo Institute (CESifo)
Time of origin
- 2001
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