... financial assets and local physical capital are imperfectly malleable and, thus, capital is imperfectly mobile. • Governments charge taxes and provide a productive input. They are benevolent and maximise ... production: capital, labour, and a publicly provided input, denoted K(t), L(t), and G(t), respectively, where t denotes time. For the sake of a simpler notation, the time argument will be omitted ... exogenous to individual capital owners and to governments of individual jurisdictions, but endogenously determined by demand and supply on the federal level. Assets and physical capital are imperfectly...