TY - JOUR
T1 - Interregional transfers: A political-economy CGE approach
AU - Groenewold, Nicolaas
AU - Hagger, A.J.
AU - Madden, J.F.
PY - 2003
Y1 - 2003
N2 - We model the effects of changes in a federal government's inter-regional transfers within the context of a CGE model of a federal system in which regional governments act to maximise the welfare of the residents of their region subject to the effects of their decision on regional economic outcomes. Regional governments are modelled as players in a non-cooperative game. Simulations are conducted with six versions of a small two-region model, each calibrated for a particular Australian state and the rest of the nation. We show that a change in the level of transfers has little influence on per-capita private consumption, government consumption and welfare, and that its main effect is to induce migration from the donor region to the recipient region.
AB - We model the effects of changes in a federal government's inter-regional transfers within the context of a CGE model of a federal system in which regional governments act to maximise the welfare of the residents of their region subject to the effects of their decision on regional economic outcomes. Regional governments are modelled as players in a non-cooperative game. Simulations are conducted with six versions of a small two-region model, each calibrated for a particular Australian state and the rest of the nation. We show that a change in the level of transfers has little influence on per-capita private consumption, government consumption and welfare, and that its main effect is to induce migration from the donor region to the recipient region.
U2 - 10.1007/s10110-003-0191-x
DO - 10.1007/s10110-003-0191-x
M3 - Article
SN - 1056-8190
VL - 82
SP - 535
EP - 554
JO - Papers in Regional Science
JF - Papers in Regional Science
IS - 4
ER -