Bulletin n. 1/2009
July 2009
CONTENTS
  • Section A) The theory and practise of the federal states and multi-level systems of government
  • Section B) Global governance and international organizations
  • Section C) Regional integration processes
  • Section D) Federalism as a political idea
    • Raymond G. Batina
    Local capital tax competition and coordinated tax reform in an overlapping generations economy
    in Regional Science and Urban Economics , Volume 39, Issue 4 ,  2009 ,  472-478
    We extend the classic capital tax competition model to an overlapping generations economy and study the effects of a coordinated reform where capital tax rates across all locations are increased to alleviate the policy externality. Welfare across generations is examined and several new effects are derived. Simulations calibrated to US data indicate these effects may be as large as the spending effect of the classic model. The initial old generation, however, may not be better off, and an additional transfer from the initial young to the initial old may be required for the reform to be a Pareto improvement.
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