The regional and cohesion policy of the European union redistributes among regions and countries. Regional investment in (public) infrastructure is supported with matching grants. This article asks why matching grants instead of unconditional grants are used. It analyzes to which extent vertical...

This paper analyzes the impact of fiscal competition through infrastructure in a New Economic Geography framework. It is shown that regional competition leads to convergence if the trade costs are high but induces divergence if trade cost have fallen below a certain value. Moreover, fiscal...

The paper derives a normative model for partial fiscal equalisation based on a number of axioms and allows for the existence of a specific fiscal need in the jurisdictions. The theoretical model is then empirically tested for the case of the European Union using data from 1986-97. It is found...

Der Sachverständigenrat hat in seinen Jahresgutachten 2002/03 den Vorschlag unterbreitet, die gesetzliche Krankenversicherung durch Kopfpauschalen zu finanzieren, ohne zugleich die gesamte Wohnbevölkerung in die Versicherungspflicht zu nehmen. Prof. Dr. Matthias Wrede, RWTH Aachen, zeigt in...

Die im Koalitionsvertrag angekündigte steuerliche Förderung von haushaltnahen Dienstleistungen, privaten Aufwendungen für Erhaltungs- und Modernisierungsmaßnahmen im Haushalt und Kinderbetreuungskosten sollten nach Ansicht von Matthias Wrede, RWTH Aachen, nicht auf qualifizierte...

In this paper a neoclassical growth model is used to analyze public debt in a growing economy with two levels of government. The main focus is on the existence and the stability of long run cquilibria in a growing federal state. It is shown that the equilibrium in a federation with two levels of...

Analyzing a homogenous household setting with endogenous fertility and endogenous labor supply, we demonstrate that moving from joint taxation to individual taxation and adapting child benefits so as to keep fertility constant entails a Pareto improvement. The change is associated with an...

This paper analyzes the effects of an income splitting system on marriage partners. The focus is on the time allocation, on investment in marriage-specific human capital and on the distribution of income within the family. Two insights are discussed in detail. First, the distribution of...

Employing a political-economics approach, this paper compares small states and unions when the former fail to internalize cross-border externalities of publicly provided goods. It discusses two types of unions: federations with more than one level of government and unitary states. While unitary...