Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/217729 
Year of Publication: 
2014
Citation: 
[Journal:] European Journal of Government and Economics (EJGE) [ISSN:] 2254-7088 [Volume:] 3 [Issue:] 1 [Publisher:] Universidade da Coruña [Place:] A Coruña [Year:] 2014 [Pages:] 75-87
Publisher: 
Universidade da Coruña, A Coruña
Abstract: 
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.
Subjects: 
Public inputs
unemployment
vertical externalities
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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