We show that Ricardian equivalence holds for local public finance if and only if subnational units use property taxes. However, for other tax bases, the unique equilibrium has the same economic outcome as in models where districts may not issue debt.

We use the supply chain matching framework to study the effects of firm exit. We show that the exit of an initial supplier or end consumer has monotonic effects on the welfare of initial suppliers and end consumers but may simultaneously have positive and negative effects on intermediaries....