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Public Input Provision in Asymmetric Regions with Labor Market Imperfections

机译:劳动力市场不完善的不对称地区的公共投入供给

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This paper examines efficiency in public input provision in two large regions with labor market imperfections. Because employment and pecuniary externalities are associated with public input provision, the provision level exceeds the optimal amount under the presence of wage rigidities in the capital-exporting jurisdiction if only head taxes are used to finance government expenditures. Efficiency in public input provision will remain ambiguous in the capital-importing jurisdiction unless a specific functional form is assumed for the production technology. The constrained efficient provision with public inputs can be restored with an additional tax (subsidy) on capital that is used to strategically influence the interest rate on the common capital market and to increase employment by attracting foreign capital.
机译:本文考察了劳动力市场不完善的两个大区域的公共投入提供效率。由于就业和金钱外部性与公共投入提供相关,因此,如果仅使用人头税来资助政府支出,则在资本刚性地区存在工资刚性的情况下,提供水平会超过最佳金额。除非假定生产技术采用特定的功能形式,否则公共投入提供的效率在资本输入地区仍然不明确。可以用对资本的附加税(补贴)来恢复受到公共投入约束的有效供给,该税收可用于从战略上影响共同资本市场的利率并通过吸引外资来增加就业。

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