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Published on: June 24, 2019
Abstract:
"This paper analyses the distribution of a country's population among regions when migration involves fiscal externalities. The main question addressed is whether a decentralized decision making [by] regional governments can produce an optimal population distribution...or a centralized intervention is indispensable, as argued before in the literature.... It turns out that, while with costless mobility the fiscal externality is fully internalized by voluntary interregional transfers, with costly mobility, centrally coordinated transfers still remain indispensable for achieving the socially optimal allocation."
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