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Fiscal decentralization is on the rise worldwide while barriers to factor and population mobility are declining … this combination of decentralization and mobility may have on political and economic outcomes. As these trends have become … models and data has taken on particular importance. Complex general equilibrium models of fiscal decentralization ultimately …
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. We show the potential existence of a poverty trap as a result of decentralization in taxation decisions. …
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In a monetary union, the interaction between several governments and a single central bank is plagued by several sources of deficit bias, including common pool problems. Each government has strong preferences over local spending and taxation but suffers only part of the costs of union-wide...
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