Resource title

Fiscal competition, convergence and agglomeration

Resource image

image for OpenScout resource :: Fiscal competition, convergence and agglomeration

Resource description

This paper analyzes the impact of fiscal competition through infrastructure in a New Economic Geography framework. It is shown that regional competition leads to convergence if the trade costs are high but induces divergence if trade cost have fallen below a certain value. Moreover, fiscal competition yields an overprovision if the trade costs are sizable while it leads to underprovision if the regions are highly integrated. Finally, a trade-off between regional convergence and efficiency arises since the efficient distribution of regional infrastructure requires full agglomeration for sufficiently low trade costs.

Resource author

Robert Fenge, Maximilian von Ehrlich, Matthias Wrede

Resource publisher

Resource publish date

Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/26129

Resource license

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