Asymmetric capital-tax competition, unemployment and losses from capital market integration
AbstractIn a multi-country general equilibrium economy with mobile capital and rigidwage unemployment, countries may differ in capital endowments, production technologies and rigid wages. Governments tax capital at the source to maximize national welfare. They account for tax base responses to their tax and take as given the world-market interest rate. We specify conditions under which - in contrast to free trade with undistorted labor markets - welfare declines and unemployment increases in some countries (i) when moving from autarky to trade without taxation and/or (ii) when moving from trade without taxation to tax competition.
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 Universität Siegen, Fakultät Wirtschaftswissenschaften, Wirtschaftsinformatik und Wirtschaftsrecht in its series Volkswirtschaftliche Diskussionsbeiträge with number 137-09.
Length: 30 pages
Date of creation: 2009
Date of revision:
Contact details of provider:
Postal: Hölderlinstr. 3, D - 57068 Siegen
Phone: ++49 (0)271 740-3139
Fax: ++49 (0)271 740-2590
Web page: http://www.uni-siegen.de/fb5/vwl/research/diskussionsbeitraege/
More information through EDIRC
capital taxation; asymmetric tax competition; rigid wages; unemployment; losses from trade;
Other versions of this item:
- Rüdiger Pethig & Frieder Kolleß, 2009. "Asymmetric capital-tax competition, unemployment and losses from capital market integration," MAGKS Papers on Economics 200940, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
- Rüdiger Pethig & Frieder Kolleß, 2009. "Asymmetric Capital-Tax Competition, Unemployment and Losses from Capital Market Integration," CESifo Working Paper Series 2795, CESifo Group Munich.
- E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution
- H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
- H87 - Public Economics - - Miscellaneous Issues - - - International Fiscal Issues; International Public Goods
- J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
- R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies
- F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-09-26 (All new papers)
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.:
- Peralta, Susana & van Ypersele, Tanguy, 2005. "Factor endowments and welfare levels in an asymmetric tax competition game," Journal of Urban Economics, Elsevier, vol. 57(2), pages 258-274, March.
- Nickell, Stephen J, 1990. "Unemployment: A Survey," Economic Journal, Royal Economic Society, vol. 100(401), pages 391-439, June.
- Yasuhiro, SATO & Jacques-François, THISSE, 2005.
"Competing for capital when labor is heterogeneous,"
Discussion Papers (ECON - DÃ©partement des Sciences Economiques)
2005045, Université catholique de Louvain, Département des Sciences Economiques.
- Sato, Yasuhiro & Thisse, Jacques-François, 2007. "Competing for Capital When Labour is Heterogeneous," CEPR Discussion Papers 6186, C.E.P.R. Discussion Papers.
- SATO, Yasuhiro & THISSE, Jacques-François, . "Competing for capital when labor is heterogeneous," CORE Discussion Papers RP -1992, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- SATO, Yasuhiro & THISSE, Jacques-François, 2005. "Competing for capital when labor is heterogeneous," CORE Discussion Papers 2005061, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Yasuhiro Sato & Jacques-Francois Thisse, 2006. "Competing for capital when labor is heterogeneous," CIRJE F-Series CIRJE-F-456, CIRJE, Faculty of Economics, University of Tokyo.
- Aronsson, Thomas & Wehke, Sven, 2006.
"Public Goods, Unemployment and Policy Coordination,"
UmeÃ¥ Economic Studies
700, Umeå University, Department of Economics.
- Aronsson, Thomas & Wehke, Sven, 2008. "Public goods, unemployment and policy coordination," Regional Science and Urban Economics, Elsevier, vol. 38(3), pages 285-298, May.
- Bucovetsky, S., 1991. "Asymmetric tax competition," Journal of Urban Economics, Elsevier, vol. 30(2), pages 167-181, September.
- Wilson, John Douglas, 1991.
"Tax competition with interregional differences in factor endowments,"
Regional Science and Urban Economics,
Elsevier, vol. 21(3), pages 423-451, November.
- Wilson, J.D., 1990. "Tax Competition With Interregional Differences In Factor Endowments," Working Papers 4, John Deutsch Institute for the Study of Economic Policy.
- Clemens Fuest & Bernd Huber, 1999.
"Tax Coordination and Unemployment,"
International Tax and Public Finance,
Springer, vol. 6(1), pages 7-26, February.
- Wolfgang Eggert & Laszlo Goerke, 2003.
"Fiscal Policy, Economic Integration and Unemployment,"
CESifo Working Paper Series
1102, CESifo Group Munich.
- Eggert, Wolfgang & Goerke, Laszlo, 2003. "Fiscal Policy, Economic Integration and Unemployment," IZA Discussion Papers 937, Institute for the Study of Labor (IZA).
- Wolfgang Eggert & Laszlo Goerke, . "Fiscal Policy, Economic Integration and Unemployment," EPRU Working Paper Series 02-05, Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics.
- Wilson, John D., 1986. "A theory of interregional tax competition," Journal of Urban Economics, Elsevier, vol. 19(3), pages 296-315, May.
- Aloi, Marta & Leite-Monteiro, Manuel & Lloyd-Braga, Teresa, 2009.
"Unionized labor markets and globalized capital markets,"
Journal of International Economics,
Elsevier, vol. 78(1), pages 149-153, June.
- Marta Aloi & Manuel Leite-Monteiro & Teresa Lloyd-Braga, . "Unionized Labor Markets and Globalized Capital Markets," Discussion Papers 08/10, University of Nottingham, Centre for Finance, Credit and Macroeconomics (CFCM).
- Chris Papageorgiou & Fidel Pérez Sebastián & John Duffy, 2002.
"Capital-Skill Complementarity? Evidence From A Panel Of Countries,"
Working Papers. Serie AD
2002-09, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
- John Duffy & Chris Papageorgiou & Fidel Perez-Sebastian, 2004. "Capital-Skill Complementarity? Evidence from a Panel of Countries," The Review of Economics and Statistics, MIT Press, vol. 86(1), pages 327-344, February.
- Chris Papageorgiou & John Duffy & Fidel Perez-Sebastian, . "Capital-Skill complementarity? Evidence from a Panel of Countries," Departmental Working Papers 2003-12, Department of Economics, Louisiana State University.
- Manuel Leite-Monteiro & Maurice Marchand & Pierre Pestieau, 2003.
"Employment Subsidy with Capital Mobility,"
Journal of Public Economic Theory,
Association for Public Economic Theory, vol. 5(2), pages 327-344, 04.
- Zodrow, George R. & Mieszkowski, Peter, 1986. "Pigou, Tiebout, property taxation, and the underprovision of local public goods," Journal of Urban Economics, Elsevier, vol. 19(3), pages 356-370, May.
- Lockwood, Ben & Makris, Miltiadis, 2004.
"Tax Incidence, Majority Voting And Capital Market Integration,"
The Warwick Economics Research Paper Series (TWERPS)
712, University of Warwick, Department of Economics.
- Lockwood, Ben & Makris, Miltiadis, 2006. "Tax incidence, majority voting and capital market integration," Journal of Public Economics, Elsevier, vol. 90(6-7), pages 1007-1025, August.
- Fuest, Clemens & Huber, Bernd, 1999. "Tax Coordination and Unemployment," Munich Reprints in Economics 20298, University of Munich, Department of Economics.
- Bergstrom, Villy & Panas, Epaminondas E, 1992. "How Robust Is the Capital-Skill Complementarity Hypothesis?," The Review of Economics and Statistics, MIT Press, vol. 74(3), pages 540-46, August.
- DePeter James A. & Myers Gordon M., 1994. "Strategic Capital Tax Competition: A Pecuniary Externality and a Corrective Device," Journal of Urban Economics, Elsevier, vol. 36(1), pages 66-78, July.
- Kessler, Anke S. & Lulfesmann, Christoph & Myers, Gordon M., 2003. "Economic versus political symmetry and the welfare concern with market integration and tax competition," Journal of Public Economics, Elsevier, vol. 87(5-6), pages 847-865, May.
- Eaton, Jonathan & Panagariya, Arvind, 1979. "Gains from trade under variable returns to scale, commodity taxation, tariffs and factor market distortions," Journal of International Economics, Elsevier, vol. 9(4), pages 481-501, November.
- Ogawa, Hikaru & Sato, Yasuhiro & Tamai, Toshiki, 2006. "A note on unemployment and capital tax competition," Journal of Urban Economics, Elsevier, vol. 60(2), pages 350-356, September.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael Gail).
If references are entirely missing, you can add them using this form.