Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/75821
Authors: 
Fenge, Robert
Meier, Volker
Year of Publication: 
2001
Series/Report no.: 
CESifo Working Paper 546
Abstract: 
The paper deals with the question of whether fiscal transfers re-ceived by cities can be justified by a higher cost of producing publicly provided goods. In the model, increasing the population density implies both a higher output per capita due to agglomeration economies and a higher cost of the publicly provided good due to congestion. It is shown that introducing fiscal transfers to be paid by the region with the lower population density will generally reduce welfare. This result is obtained since the city is already beyond the level of optimum agglomeration.
Subjects: 
interjurisdictional transfers
congestion
publicly provided goods
Document Type: 
Working Paper

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