Vertical externalities with lump-sum taxes: how much difference does unemployment make?

  1. Diego Martinez-Lopez
  2. Tomas Sjongren
Revista:
European Journal of Government and Economics

ISSN: 2254-7088

Año de publicación: 2014

Volumen: 3

Número: 1

Páginas: 75-87

Tipo: Artículo

DOI: 10.17979/EJGE.2014.3.1.4298 DIALNET GOOGLE SCHOLAR lock_openAcceso abierto editor

Otras publicaciones en: European Journal of Government and Economics

Resumen

This paper analyses how the existence of unemployment affects the conventional approach to vertical externalities. We discuss the optimality rule for the provision of public inputs both in a unitary and in a federal state. Our findings indicate that decentralising spending responsability on public inputs in the presence of unemployment allows output to be closer to the first best level. Moreover, we describe the inability of the federal government, behaving as a Stackelberg leader, to replicate the unitary outcome, unless there are new policy instruments at government's disposal.

Referencias bibliográficas

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Fuente de los datos: Dialnet