Fiscal Harmonization and Portfolio Choice
AbstractIn this paper, we consider a two-country model based on Svensson (1989) in order to analyze how fiscal harmonization impacts on economic growth and welfare through its effects on agents portfolio decisions in an uncertain world. We derive the conditions under which fiscal harmonization proves to be welfare enhancing and analyse how the set of initial tax rates leading to a welfare improving harmonization is affected by uncertainty and assets returns correlation. In particular, the results obtained suggest that the probability for tax harmonization to be welfare improving is first increasing and then decreasing with uncertainty while it monotonically decreases with the correlation between the assets returns shocks.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Université de Lausanne, Faculté des HEC, DEEP in its series Cahiers de Recherches Economiques du Département d'Econométrie et d'Economie politique (DEEP) with number 02.16.
Length: 29 pp.
Date of creation: Mar 2002
Date of revision:
Contact details of provider:
Postal: Université de Lausanne, Faculté des HEC, DEEP, Internef, CH-1015 Lausanne
Phone: ++41 21 692.33.64
Fax: ++41 21 692.33.05
Web page: http://www.hec.unil.ch/deep/publications/cahiers/series
More information through EDIRC
fiscal harmonization; growth; uncertainty;
Find related papers by JEL classification:
- E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
- F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
- F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
- H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence
- O16 - Economic Development, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
This paper has been announced in the following NEP Reports:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Sinn, Hans-Werner, 1994.
"How much Europe? Subsidiarity, centralization and fiscal competition,"
Munich Reprints in Economics
19838, University of Munich, Department of Economics.
- Sinn, Hans-Werner, 1994. "How Much Europe? Subsidiarity, Centralization and Fiscal Competition," Scottish Journal of Political Economy, Scottish Economic Society, vol. 41(1), pages 85-107, February.
- Sinn, Hans-Werner, 1993. "How Much Europe? Subsidiarity, Centralization and Fiscal Competition," CEPR Discussion Papers 834, C.E.P.R. Discussion Papers.
- Duffie, Darrell & Epstein, Larry G, 1992. "Asset Pricing with Stochastic Differential Utility," Review of Financial Studies, Society for Financial Studies, vol. 5(3), pages 411-36.
- Maurice Obstfeld, 1992.
"Risk-Taking, Global Diversification, and Growth,"
NBER Working Papers
4093, National Bureau of Economic Research, Inc.
- Obstfeld, Maurice, 1992. "Risk-Taking, Global Diversification, and Growth," CEPR Discussion Papers 688, C.E.P.R. Discussion Papers.
- Maurice Obstfeld., 1993. "Risk-Taking, Global Diversification, and Growth," Center for International and Development Economics Research (CIDER) Working Papers C93-016, University of California at Berkeley.
- Maurice Obstfeld, 1992. "Risk-taking, global diversification, and growth," Discussion Paper / Institute for Empirical Macroeconomics 61, Federal Reserve Bank of Minneapolis.
- Epstein, Larry G & Zin, Stanley E, 1989. "Substitution, Risk Aversion, and the Temporal Behavior of Consumption and Asset Returns: A Theoretical Framework," Econometrica, Econometric Society, vol. 57(4), pages 937-69, July.
- Smith, William T., 1996. "Taxes, uncertainty, and long-term growth," European Economic Review, Elsevier, vol. 40(8), pages 1647-1664, November.
- Cremer, Helmuth & Gahvari, Firouz, 2000. "Tax evasion, fiscal competition and economic integration," European Economic Review, Elsevier, vol. 44(9), pages 1633-1657, October.
- Wälde, Klaus, 2011.
"Production technologies in stochastic continuous time models,"
Journal of Economic Dynamics and Control,
Elsevier, vol. 35(4), pages 616-622, April.
- Klaus Wälde, 2009. "Production Technologies in Stochastic Continuous Time Models," CESifo Working Paper Series 2831, CESifo Group Munich.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Claudine Delapierre Saudan).
If references are entirely missing, you can add them using this form.