Resource title

Agglomeration and tax competition

Resource image

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Resource description

Tax competition for a mobile factor is different in `new economic geography set- tings' compared to standard tax competition models. The agglomeration rent which accrues to the mobile factor in the core region can be taxed. Moreover, a tax differential between the core and the periphery can be maintained. The present paper reexamines this issue in a setting which, in addition to the core-periphery equilibria, exhibits stable equilibria with partial agglomeration. We show that a tax differential may arise as an equilibrium of the tax game even when there is only partial agglomeration and the mobile factor does not derive an agglomeration rent.

Resource author

Michael Pflüger, Rainald Borck

Resource publisher

Resource publish date

Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/18104

Resource license

Adapt according to the presented license agreement and reference the original author.