Too-big-to-fail in federations
Bibliographic Data
| ID | 21463839 |
|---|---|
| Authors | Zarko Kalamov (0000-0002-1016-3415, Technische Universität Berlin), Klaas Staal (0000-0003-3719-8594, Karlstad University, corresponding author) |
| Year | 2023 |
| Volume | 101 |
| Pages | 103917 |
| Publication date | 2023-07-01 |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | Regional Science and Urban Economics (JOURNAL) |
| Journal identifiers | ISSN: 0166-0462 • E-ISSN: 1879-2308 |
| Publisher | Elsevier BV (PUBLISHER) |
| DOI | 10.1016/j.regsciurbeco.2023.103917 |
| OpenAlex | W4379791419 |
| Language | EN |
| References cited | 49 |
We consider jurisdictions of different population size that provide local public goods with positive spillovers. Matching grants can induce optimal expenditure levels, but the regions can exploit the rationale behind this system to induce bailouts. We formalize the too-big-to-fail result of Wildasin (1997) by proving that it exists in a subgame-perfect Nash equilibrium, in which the central government’s decisions are taken by regional representatives. Furthermore, our model contains the too-big-to-fail and too-small-to-fail outcomes as special cases, and we are the first to derive the conditions under which each result emerges
Big government · Computer security · Economics · Exploit · Macroeconomics · Mathematical economics · Microeconomics · Nash equilibrium · Political science · Population · Public economics · Public good · Subgame perfect equilibrium · Too big to fail · Computer Science · Corporate Taxation and Avoidance · Fiscal Policy and Economic Growth · Law · Local Government Finance and Decentralization · Mathematics
Fiscal Decentralization and the Challenge of Hard Budget Constraints
Tax Mimicking and Yardstick Competition Among Local Governments in the Netherlands
The spillover effects of state spending
The Costs of Remoteness
Budget spillovers and fiscal policy interdependence
The impact of ‘central places’ on spatial spending patterns
Is It Is or Is It Ain't My Obligation? Regional Debt in a Fiscal Federation
Transfers and Bailouts
Expenditure spillovers and fiscal interactions
A simple dynamic decentralized leadership model with private savings and local borrowing regulation
Too big or too small? A synthetic view of the commitment problem of interregional transfers
Exit, Voice, and Mimicking Behavior
Spatial interaction model of spillovers from locally provided public services
Spatial Spillover Effects in the Swedish Local Rescue Services
Interactions in Local Governments' Spending Decisions
Local Expenditure Interaction in Italian Municipalities
| Highly cited | No |
|---|