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-subsidized region has to import more. Moreover, when the subsidy is financed by a uniform income tax, all economic agents bear the tax … residents in the non-subsidised region are not hurt by the income loss, but they still lose due to higher price index. The … residents of the subsidised region have to give up more of their income for financing the subsidy. Thus, in both cases the net …
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integration (such as the new economic geography, urbanization economics, and the theory of comparative advantages), surveys the …
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