The Flypaper and Teflon Effects: Evidence from China

DOI: 10.4236/me.2012.37103   PDF   HTML     4,324 Downloads   6,364 Views   Citations

Abstract

In this paper, we analyze how public spending responds to income and intergovernmental fiscal transfer shocks in China. Similar to federations around the world, we find the flypaper effect at the provincial level since the country became a de facto federation in 1980. Before 1980 we find what we define as the teflon effect at the central government level. We rationalize the latter regularity using collection costs/distortionary taxation arguments

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L. Lee and G. Vuletin, "The Flypaper and Teflon Effects: Evidence from China," Modern Economy, Vol. 3 No. 7, 2012, pp. 811-816. doi: 10.4236/me.2012.37103.

Conflicts of Interest

The authors declare no conflicts of interest.

References

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