Arcalean, Calin; Glomm, Gerhard; Schiopu, Ioana; … - In: Canadian Journal of Economics 43 (2010) 3, pp. 832-859
We study the optimal degree of fiscal decentralization in a dynamic federal economy where governments decide on budget size and its allocation between public education and infrastructure spending. We find that full centralization of tax and expenditure policies is optimal when infrastructure...