Public debt asymmetries: the effect on taxes and spending in the European Union
The aim of this paper is two-fold: First, assuming public debts are pre-determined and in their steady state in EU countries, the paper investigates the effect of asymmetric debt service obligations on taxes, primary spending and the tax mix in EU countries. Second, it investigates how increased tax competition may change these effects. The impact of debt service on taxes, primary spending and the tax mix is derived in a simple model of tax competition, and the hypotheses derived from the model are tested empirically for a panel of EU countries. Cross- countrdifferences in public debts are found to lead to asymmetries in taxes and primary expenditures across EU countries, with high debt countries having lower expenditures and higher taxes than low debt countries. Capital mobility is found to increase these asymmetries, and trigger cross-country asymmetries in the tax mix of EU countries. JEL Classification: H6, H23, H73, H87, F02
|Date of creation:||Aug 2002|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: +49 69 1344 0
Fax: +49 69 1344 6000
Web page: http://www.ecb.europa.eu/
More information through EDIRC
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.:
- Dani Rodrik, 1998.
"Why Do More Open Economies Have Bigger Governments?,"
Journal of Political Economy,
University of Chicago Press, vol. 106(5), pages 997-1032, October.
- Dani Rodrik, 1996. "Why Do More Open Economies Have Bigger Governments?," NBER Working Papers 5537, National Bureau of Economic Research, Inc.
- Rodrik, Dani, 1996. "Why do More Open Economies Have Bigger Governments?," CEPR Discussion Papers 1388, C.E.P.R. Discussion Papers.
- Signe Krogstrup, 2003. "Are Capital Taxes Racing to the Bottom in the European Union?," IHEID Working Papers 01-2003, Economics Section, The Graduate Institute of International Studies.
- Mark Hallerberg & Jurgen von Hagen, 1997.
"Electoral Institutions, Cabinet Negotiations, and Budget Deficits in the European Union,"
NBER Working Papers
6341, National Bureau of Economic Research, Inc.
- Mark Hallerberg & Jürgen von Hagen, 1999. "Electoral Institutions, Cabinet Negotiations, and Budget Deficits in the European Union," NBER Chapters, in: Fiscal Institutions and Fiscal Performance, pages 209-232 National Bureau of Economic Research, Inc.
- repec:ner:tilbur:urn:nbn:nl:ui:12-73027 is not listed on IDEAS
- Réjane Hugounenq & Jacques Le Cacheux & Thierry Madiès, 1999.
"Diversité des fiscalités européennes et risque de concurrence fiscale,"
Sciences Po publications
info:hdl:2441/2094, Sciences Po.
- Jacques Le Cacheux & Thierry Madiès & Réjane Hugounenq, 1999. "Diversité des fiscalités européennes et risques de concurrence fiscale," Revue de l'OFCE, Programme National Persée, vol. 70(1), pages 63-109.
When requesting a correction, please mention this item's handle: RePEc:ecb:ecbwps:20020162. 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: (Official Publications)
If references are entirely missing, you can add them using this form.