Fiscal Transfers in the Spatial Economy

• 成果类型: Article
• 署名作者: Henkel, Marcel; Seidel, Tobias; Suedekum, Jens
• 署名单位: University of Bern; University of Duisburg Essen; Leibniz Association; Ifo Institut; Heinrich Heine University Dusseldorf
• 刊物名称: AMERICAN ECONOMIC JOURNAL-ECONOMIC POLICY
• ISSN/ISSBN: 1945-7731
• DOI: 10.1257/pol.20180294
• 发表日期: 2021
• 页码: 433-468
• 关键词: productivity; EFFICIENCY; GOODS; TRADE

摘要

Many countries shift substantial public resources across jurisdictions to mitigate spatial economic disparities. We use a general equilibrium model with multiple asymmetric regions, labor mobility, and costly trade to carve out the aggregate implications of fiscal transfers. Calibrating the model for Germany, we find that transfers indeed deliver smaller disparities across regions. This comes at the cost of lower national output, however, because economic activity is diverted away from core cities and toward remote areas with low productivity. But despite this loss in output per capita by about 2 percent in our baseline specification, welfare still increases by 0.07 percent because the transfer scheme countervails overcongestion in large cities. If the optimal transfer regime was implemented, welfare would increase by 0.06 percent.