We study the strategic incentives of regional governments to allocate their budget to public investment and to public consumption expenditures against the background of an incentive-compatible redistribution policy set by the central government. Regional investment changes the productivity...

A simple rule of thumb which has been successfully used in the basic neoclassical growth model as an alternative to the unstable dynamic optimization solution is shown to be more generally applicable in a non-scale growth model with learning by doing. The model is formulated in accordance with...

Spatial wage differences other incentives to change the location of work either by commuting or by moving to the new work location. Combining an intensive labor supply margin with an extensive, productivity-enhancing margin of work place change due to commuting or moving, I study how spatial...

Under the assumption of imperfect competition in a durable good industry, the present paper investigates the efficient regulation of solid waste which causes environmental damage at the end of the product's life. It turns out that the second-best waste tax falls short of the marginal...

Combining an intensive labor supply margin with an extensive, productivity-enhancing migration margin, we determine how regional inequality and labor mobility shape optimal redistribution. We propose the use of delayed optimal-control techniques to obtain optimal tax formulae with...

Internalizing the global negative externality of carbon emissions requires flattening the extraction path of world fossil energy resources (= world carbon emissions). We consider governments having sign-unconstrained emission taxes at their disposal and seeking to prevent world emissions from...

We introduce cross-border shopping and indirect tax competition into a model of optimal taxation. The Atkinson-Stiglitz result that indirect taxation cannot improve the efficiency of information-constrained tax-transfer policies, and that indirect taxes should not be differentiated across goods,...