Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/129493
Authors: 
Dalvai, Wilfried
Year of Publication: 
2016
Series/Report no.: 
Thünen-Series of Applied Economic Theory 143
Abstract: 
This paper models the migration of the Creative Class (Florida, 2003) in a New-Economic-Geography framework. Beside wage differentials, urban cultural amenities play an important role on the choice of location. A public cultural good, financed by taxes, is introduced as an agglomeration force. The public-good is purely consumed by skilled workers. Additionally urban cultural diversity across cities is taken into account to model exogenous differences between cities. I analyze the political equilibrium of tax competition. Furthermore the effects of asymmetries of cities and trade liberalization is examined. There is an optimal level of provision of public cultural goods. In the dispersion-scenario the equilibrium tax rate for workers is hump-shaped with respect to trade integration while for skilled workers it is u-shaped. In the core-periphery scenario the equilibrium tax rate for the core decreases with increasing trade freeness.
Subjects: 
Creative Class
New Economic Geography
Agglomeration
Urban Cultural Amenities
Public Cultural Goods
Tax Competition
JEL: 
F12
H87
J24
R1
Document Type: 
Working Paper

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