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A Repeated Interactions Model of Tax Competition

Author

Listed:
  • Cardarelli, R.
  • Taugourdeau, E.
  • Vidal, J.-P.

Abstract

Models of tax competition usually assume a single period framework. This paper sets up a repeated interactions model of tax competition, and establishes conditions under which fiscal policy harmonization can result from repeated interactions between governments. It is shown that fiscal policy harmonization can not prevail when regional asymmetries are too strong. In such a case, the only way out is to set up a central fiscal authority.

Suggested Citation

  • Cardarelli, R. & Taugourdeau, E. & Vidal, J.-P., 1999. "A Repeated Interactions Model of Tax Competition," Papiers d'Economie Mathématique et Applications 1999.73, Université Panthéon-Sorbonne (Paris 1).
  • Handle: RePEc:fth:pariem:1999.73
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    Keywords

    COMPETITION ; INTERNATIONAL POLITICS ; TAXATION;
    All these keywords.

    JEL classification:

    • F2 - International Economics - - International Factor Movements and International Business
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue

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