## Animations for "Fiscal Competition for Imperfectly-Mobile Labor and Capital: A Comparative Dynamic Analysis"

Figures 1-3 in the above-mentioned paper show how factor price adjust
gradually to changes in fiscal policy. The time-paths of adjustment
depend on the adjustment cost parameters of the model.

Animations provide a convenient means by which to illustrate the
sensitivity of these factor-price adjustment paths to changes in the
adjustment cost parameters. One can see how the entire shape of the
path varies as adjustment costs go from low to high (and adjustment
speeds go from fast to slow). With two policy parameters and two
adjustment cost parameters, there are four cases to consider.

Clicking on the links below should initiate the animations, which (of
course) cannot be displayed in the published version of the paper.
One note on interpretation: the actual numerical values of the
adjustment cost parameter, displayed at the top of each figure, is not
so important here; what matters more is the time horizon over which
most of the dynamic adjustment occurs, as seen in the figures by the
times, in years, at which the time paths get fairly close to their
asymptotes.

#### 1. Changes in the Taxation of *Labor* (the factor with a high
factor share)

How the Response of Factor Prices Depends on the Mobility (aka
adjustment cost parameter) of
(a) *Labor.*

(b)
*Capital.*

#### 2. Changes in the Taxation of *Capital* (the factor with a low
factor share)

How the Response of
Factor Prices Depends on the Mobility (aka
adjustment cost parameter) of
(a) *Labor.*

(b)
*Capital.*

###
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*David E. Wildasin* /* dew@davidwildasin.us*

Martin School of Public Policy

and Department of Economics

University of Kentucky

Lexington, KY 40506-0027

USA

Telephone: + 1 859 257 2456

Fax: + 1 859 343 1937