Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/18104
Authors: 
Pflüger, Michael
Borck, Rainald
Year of Publication: 
2004
Series/Report no.: 
DIW Discussion Papers 408
Abstract: 
Tax competition for a mobile factor is different in `new economic geography set- tings' 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 the 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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