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C. Vegh and G. Vuletin, “Unsticking the Flypaper Effect Using Distortionary Taxation,” Mimeo, University of Maryland and Colby College, Waterville, 2012.

has been cited by the following article:

• TITLE: The Flypaper and Teflon Effects: Evidence from China

  AUTHORS: Lyoe Lee, Guillermo Vuletin

  KEYWORDS: Flypaper Effect; Teflon Effect; Fiscal Federalism; Fiscal Reform; China

  JOURNAL NAME: Modern Economy, Vol.3 No.7, November 29, 2012

  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