This paper is concerned primarily with the economic and welfare consequences of federal redistributive grants to regional governments. We use a model that has two regions, each with households, firms, and a regional government as well as a federal government. The households, firms, and regional...

This paper analyses a simple inter-governmental transfer within a two-regional federal model with optimising regional governments and an exogenous federal government. Regions are linked by inter-regional migration of labour and households migrate from one region to the other in response to...

This paper develops a modelling framework within which questions of fiscal federalism can be handled. Regional computable general equilibrium (CGE) models form one good approach for examining such questions. However, conventional regional CGE models contain little, if any, theory relating to...