Footloose capital and productive public services

Ingrid Kubin, Pasquale Commendatore, Carmelo Petraglia

Publication: Working/Discussion PaperWU Working Paper

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Abstract

We analyse in a Footloose Capital productive public services provided by a central government aiming at reducing regional disparities. Two countervailing effects occur - one upon productivity and another upon local demand - the relative strength of which depends upon the financing scheme. Only if the "rich" region contributes sufficiently to the financing of the public services in the "poor" region, the poor region will actually gain. In studying these questions we pay particular attention to the dynamic adjustment processes and to the role of trade freeness.
Original languageEnglish
Place of PublicationWien
PublisherInst. für Volkswirtschaftstheorie und -politik, WU Vienna University of Economics and Business
Publication statusPublished - 2007

Publication series

SeriesDepartment of Economics Working Paper Series
Number111

WU Working Paper Series

  • Department of Economics Working Paper Series

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