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Alfred Greiner and Benjamin K Owusu
''How to spend 750 billion euro? Applying sacrifice theory to determine Covid-19 compensations in the EU''
( 2020, Vol. 40 No.3 )
In this note we consider an economic union consisting of sovereign national states. An asymmetric shock hits the union and as a result it decides to set up a fund in order to compensate the countries in the union. We show how sacrifice theory can be used to determine the compensation payments for the countries in a way such that the relative damages after compensation are equal across countries. Finally, we apply our results to determine the Covid-19 compensation payments in the EU
Keywords: Public transfers, sacrifice theory, economic union
JEL: H1 - Structure and Scope of Government: General
H8 - Public Economics: Miscellaneous Issues: General
Manuscript Received : Jun 17 2020 Manuscript Accepted : Sep 24 2020

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