Equalization and the Incentives for Growth: An Empirical Investigation
of the "Tax-Back" Effect
Using vector error correction models of the economies of the six equalization-receiving provinces that received equalization payments without interruption during the 1961-1998 period, as well as a generalized impulse response analysis, the paper explores the dynamics of the interactions between flows of equalization payments and other key variable in the economies of recipient provinces.
Link
http://www.fin.gc.ca/wp/2003-23e.html