REGIONAL POLICY ANALYSIS IN A SIMPLE GENERAL EQUILIBRIUM MODEL WITH VERTICAL LINKAGES

The paper presents a simple three-region, two-sector general equilibrium model that is used for analyzing the effect of regional tax policies aimed at combat depopulation. The model includes exogenous asymmetry in terms of transport costs as well as a vertical industry structure that can account for endogenous location development in order to distinguish between the effects of "first nature" and "second nature" on the required subsidy for meeting the population policy target. Copyright (c) 2010 Wiley Periodicals, Inc.