IDEAS home Printed from
   My bibliography  Save this paper

Fiscal Policy Interdependence and Efficiency


  • Buiter, Willem H.
  • Kletzer, Kenneth


This paper uses a two-country overlapping generations model to study the international transmission of fiscal policy among open interdependent economies under free international capital mobility. With only lump-sum taxes and transfers, international transmission involves only pecuniary externalities: barring dynamic inefficiency, only distributional issues (intergenerational and international) are involved. With age-specific taxes and transfers, the ability to run deficits and issue debt does not enhance the choice set of the governments. Source-based taxes on the rentals from capital and residence-based taxes on all property income are also studi.

Suggested Citation

  • Buiter, Willem H. & Kletzer, Kenneth, 1990. "Fiscal Policy Interdependence and Efficiency," CEPR Discussion Papers 419, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:419

    Download full text from publisher

    File URL:
    Download Restriction: CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    1. Andrew B. Abel & N. Gregory Mankiw & Lawrence H. Summers & Richard J. Zeckhauser, 1989. "Assessing Dynamic Efficiency: Theory and Evidence," Review of Economic Studies, Oxford University Press, vol. 56(1), pages 1-19.
    2. Obstfeld, Maurice, 1989. "Fiscal deficits and relative prices in a growing world economy," Journal of Monetary Economics, Elsevier, vol. 23(3), pages 461-484, May.
    3. Tibor Scitovsky, 1954. "Two Concepts of External Economies," Journal of Political Economy, University of Chicago Press, vol. 62, pages 143-143.
    4. anonymous, 1987. "External debt issues," Reserve Bank of New Zealand Bulletin, Reserve Bank of New Zealand, vol. 50, june.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Buiter, Willem H. & Kletzer, Kenneth M., 1991. "The welfare economics of cooperative and noncooperative fiscal policy," Journal of Economic Dynamics and Control, Elsevier, vol. 15(1), pages 215-244.
    2. Willem H. Buiter & Kenneth M. Kletzer, 1995. "Capital Mobility, Fiscal Policy, and Growth under Self-Financing of Human Capital Formation," Canadian Journal of Economics, Canadian Economics Association, vol. 28(s1), pages 163-194, November.
    3. Philippe Thalmann & Lawrence Goulder & François Delorme, 1996. "Assessing the international spillover effects of capital income taxation," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 3(4), pages 449-478, October.
    4. Jean Cordier & Pierre Jaillet & Dominique Plihon, 1993. "La conduite des politiques économiques et le policy-mix dans l'UEM," Économie et Statistique, Programme National Persée, vol. 262(1), pages 37-48.


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cpr:ceprdp:419. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.