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| Ross, Matthias. |
| This paper analyses in the framework of a 2-region economic geography model the impact of transfers on agglomeration of economic activity. Two main results can be derived: First, subsidies to the activity of firms are more efficient to avoid agglomeration than subsidies to consumers (social policy). Second, if a less developed region starts its catch up process first increasing and afterwards decreasing transfers are necessary to avoid agglomeration. Due to these results east Germany's slowdown of convergence may be a consequence of too less transfers and especially too less firm subsidies. Furthermore, if East Germany locates still at the first stage of convergence even increasing transfers would be necessary to guarantee convergence. Im Rahmen eines... |
| Tipo: Working or Discussion Paper |
Palavras-chave: Economic geography; Economic integration; Transfers; Tax policy; East Germany; Political Economy; R12; F02; H7. |
| Ano: 2001 |
URL: http://purl.umn.edu/26161 |
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| Ross, Matthias. |
| This paper extends an economic geography model by tariffs to analyze their impact on welfare and sustainability of agglomerations. Policies with and without cooperation are compared, with the goal of maximizing aggregated welfare in the former and regional welfare in the latter case. The main result is that under cooperation poorer regions are worse off in two respects. In the short-run they loose even more welfare and in the long-run sustainable agglomerations in richer regions get more likely. Thus, although cooperation could generate aggregated welfare gains the potential losers face even in the short-run no incentive to remove tariffs unless they are compensated appropriately, for instance by transfers. In this sense transfers from the rich to the poor... |
| Tipo: Working or Discussion Paper |
Palavras-chave: Optimal tariffs; Optimal taxation; Policy coordination; Economic geography; Economic integration; Political Economy; F13; H21; F42; R12; F15. |
| Ano: 2002 |
URL: http://purl.umn.edu/26154 |
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