Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/20268 
Year of Publication: 
2004
Series/Report no.: 
IZA Discussion Papers No. 1033
Publisher: 
Institute for the Study of Labor (IZA), Bonn
Abstract: 
Tax competition for a mobile factor is different in 'new economic geography settings' compared to standard tax competition models. The agglomeration rent which accrues to the mobile factor in the core region can be taxed. Moreover, a tax differential between the core and the periphery can be maintained. The present paper reexamines this issue in a setting which, in addition to core-periphery equilibria, exhibits stable equilibria with partial agglomeration. We show that a tax differential may arise as an equilibrium of the tax game even when there is only partial agglomeration and the mobile factor does not derive an agglomeration rent.
Subjects: 
economic geography
agglomeration
tax competition
JEL: 
H73
F22
F15
R12
Document Type: 
Working Paper

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