This paper first analyzes a fiscal-policy game between two jurisdictions connected by mutual migration and obtains two main results. (i) As the mutual migration intensifies, both jurisdictions in the Nash equilibrium choose more public consumption, less public investment and more total spending, and finance the total spending entirely with debt. (ii) While the Nash equilibrium without any restriction on local government debts is characterized by too much public consumption, too little public investment and excessive debt, the first-best allocation can be achieved through Nash play by imposing the restriction that public consumption should only be financed by a contemporary tax and not by borrowing. These two results are shown to remain valid in an alternative model. The paper then goes on to analyze a model with one-directional migration and obtains results on how migration affects the fiscal policies of both the jurisdiction of migration destination and the jurisdiction of migration origin. Finally, there are a series of robustness checks to investigate the importance of various assumptions regarding the underlying environment.

中文翻译：

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跨辖区移民与地方政府的财政政策

本文首先分析了通过相互迁移连接的两个司法管辖区之间的财政政策博弈，并获得了两个主要结果。(i) 随着相互迁移的加剧，纳什均衡中的两个辖区都选择更多的公共消费、更少的公共投资和更多的总支出，并完全通过债务为总支出融资。(ii) 虽然对地方政府债务没有任何限制的纳什均衡具有公共消费过多、公共投资过少和债务过多的特点，但通过施加限制，即公共消费仅应在纳什博弈中实现最优配置由当代税收而不是借贷来资助。这两个结果在替代模型中仍然有效。然后，本文继续分析具有单向迁移的模型，并得出迁移如何影响迁移目的地管辖区和迁移来源管辖区的财政政策的结果。最后，有一系列稳健性检查来调查有关潜在环境的各种假设的重要性。