Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/43775
Authors: 
Pieretti, Patrice
Zanaj, Skerdilajda
Zou, Benteng
Year of Publication: 
2010
Series/Report no.: 
Working papers // Institute of Mathematical Economics 437
Abstract: 
In this paper, we analyze the dynamics of a very small economy which tries to attract foreign investments. For that purpose, we model the intertemporal behavior of a small jurisdiction using taxes and attractive public infrastructures as policy instruments, for given policy choices of the rest of the world. Applying Pontryagin's maximum principle, we then characterize the potential steady states which are attainable. These results give some insights into the policy behavior that may guarantee the long run survival of very small economies.
Subjects: 
public goods competition
spatial competition
foreign direct investments
country size
JEL: 
H25
H73
F13
F15
F22
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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