American Economic Review Vol. 77 No. 3 1987
Trade in a Tiebout Economy
Abstract
This paper examines interregional commodity trade in a "Tiebout Economy," that is, a many-region economy with perfect labor mobility and endogenous government decision making. For a model with scale economies in public good consumption, it is shown that any equilibrium is both Pareto efficient and asymmetric: regions containing the same types of individuals and production possibilities nevertheless differ in the traded goods which they produce and the public good levels which they provide residents.
- Volume
- 77
- Issue
- 3
- Pages
- 431-441
- Sources
- bibtex:phds-export.bib