By separating monopolistic competition from increasing returns to fully disentangle their corresponding effects, this paper find that optimal tax rates on factor incomes are decreasing in the degree of increasing returns, but are independent of the degree of market power. Moreover, free entry...

This paper applies the Blanchard overlapping generations model to examine the effects of inter-generational redistribution on aggregate growth. The results reveal that whether or not a change in policy causes growth rates to rise or fall depends in part on whether the government has chosen to...

This paper investigates the causes of municipalities secession in Brazil. We develop a model where the median voter decides on the creation of new municipalities observing the trade-off between loss of scale on public production and increase in federal transfers to his/her municipality. Voters...

The general purpose of this paper is to extend the literature regarding public good provision when consumers may contribute via consumption of an impure public good and/or by donating directly to the public good. Standard models pose consumer utility as a function of one impure public good and...

The siting of public facilities such as prisons or waste disposal facilities typically faces rejection by local populations (the "NIMBY" syndrome, for Not In My BackYard). These public goods exhibit a private bad aspect creating an asymmetry: all involved communities benefit from their...

When demand for a good exceeds its supply, queuing mechanisms are commonly used to allocate the good in question to citizens. However, very long queues result in excessive wait times and this can lead to violence. As such, the purpose of this paper is to analyze two stochastic models of goods...

In this note we analyse the provision of a pure public good with non constant production cost in the context of a federation of jurisdictions with two tiers of Government: the central and the local. The central government aims at welfare maximization but this objective is constrained to the use...

We consider a two group contest over a group specific public good comparing two situations: (i) where all players act independently; and (ii) where the players of each group cooperate. This comparison leads us to the conclusion that it is possible for one group to contribute more (and have a...

White (1996), Poyago-Theotoky (2001) and Myles (2002) prove that the optimal subsidy, equilibrium output level, all firms' profits and social welfare are identical before and after privatization of a public firm in a mixed oligopolistic market. We show that we can obtain these irrelevance...

In this note we consider a society that partitions itself into disjoint jurisdictions, each choosing a location of its public project and a taxation scheme to finance it. The set of public project is multi-dimensional, and their costs could vary from jurisdiction to jurisdiction. We impose two...