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Persistent link: https://www.econbiz.de/10010520065
We test the hypothesis that the flypaper effect can arise if the recipient government finances part of its expenditures with a distortionary tax. We present a simple theoretical framework that shows how a lump-sum transfer stimulates the marginal expenditures of a recipient government through an...
Persistent link: https://www.econbiz.de/10009571280