Working papers, Department of Economics, WU (Wirtschaftsuniversität Wien)
Footloose capital and productive public services
(), Ingrid Kubin
() and Carmelo Petraglia
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.
JEL-Codes: H4; R1; R12; F12; (follow links to similar papers)
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