Most of the diffuse Galactic GeV gamma-ray emission is produced via collisions of cosmic ray (CR) protons with ISM protons. As such the observed spectra of the gamma-rays and the CRs should be strongly linked. Recent observations of Fermi-LAT exhibit a hardening of the gamma-ray spectrum at around a hundred GeV, between the Sagittarius and Carina tangents, and a further hardening at a few degrees above and below the Galactic plane. However, standard CR propagation models that assume a time independent source distribution and a location independent diffusion cannot give rise to a spatially dependent CR (and hence gamma-ray) spectral slopes. Here we consider a dynamic spiral arm model in which the distribution of CR sources is concentrated in the (dynamic) spiral arms, and we study the effects of this model on the $pi^0$-decay produced gamma-ray spectra. Within this model, near the Galactic arms the observed gamma-ray spectral slope is not trivially related to the CR injection spectrum and energy dependence of the diffusion coefficient. We find unique signatures that agree with the Fermi-LAT observations. This model also provides a physical explanation for the difference between the local CR spectral slope and the CR slope inferred from the average gamma-ray spectrum.
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