Fiscal competition in a transition economy
Solanko, Laura (19.02.2001)
Numero
4/2001Julkaisija
Bank of Finland
2001
Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:bof-201408072053Tiivistelmä
The paper analyses fiscal competition for mobile capital between identical regions in a transition country.A framework similar to Keen-Marchand (1997) is used to analyse welfare effects of regional competition.It is shown that in very early transition when the share of the old sector is overwhelming, consumers in a transition economy may be better off in a competitive equilibrium.The decision-makers, however, would prefer to coordinate their fiscal policies.