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on Public Finance |
| By: | Tommaso Monacelli; Roberto Perotti |
| Abstract: | During a fiscal stimulus, does it matter, for the size of the government spending multiplier, which category of agents bears the brunt of the current and/or future adjustment in taxes? In an economy with heterogeneous agents and imperfect financial markets, the answer depends on whether or not New Keynesian features, such are price rigidity, are present. If prices are flexible, the tax-financing rule is either neutral or quasi-neutral. If prices are sticky, who bears the brunt of the adjustment, whether financially constrained borrowers as opposed to unconstrained savers, does matter. The differential effect on the multiplier, however, depends crucially on (i) the degree of persistence of the fiscal expansion, and (ii) on whether the expansion is balanced-budget as opposed to debt-financed. |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:igi:igierp:409&r=pub |
| By: | Marie-Laure Breuillé (INRA); Pascale Duran-Vigneron (University of Exeter); Anne-Laure Samson (Université Paris Dauphine) |
| Abstract: | The purpose of this paper is to analyze the effect of inter-municipal cooperation on local taxation. Municipalities that join/create an inter-municipal jurisdiction choose between three tax regimes, which may induce both horizontal and vertical tax externalities. Using the differences in differences method with a quasi-exhaustive panel for French municipalities over the 1994-2010 period, we show a positive causal effect of cooperation on the level of cumulative tax rates (i.e. the sum of municipal and inter-municipal tax rates). Moreover, we show that cooperation leads to a convergence of tax rates within an inter-municipal structure, which thus reduces tax disparities among municipalities. |
| Keywords: | Inter-municipal cooperation, tax competition, fiscal disparities |
| JEL: | H23 H7 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ieb:wpaper:2011/7/doc2011-13&r=pub |