Labor Mobility and Fiscal Coordination
Using a human capital based growth model, we show the essential role of labor mobility and cross-country tax harmonization in equalizing income levels of countries that start off from different initial income positions. Knowledge spillovers cum labor mobility are the driving forces behind the income level equalization process. In the absence of tax harmonization within an economic union, equality in income levels is not achievable. Coordination of educational subsidies necessary for the internalization of knowledge spillovers may or may not be necessary. These considerations constitute the basis for our efficient growth agenda for an economic union such as the EU.
|Date of creation:||Jan 1996|
|Date of revision:|
|Publication status:||published as Journal of Public Economics, 1997.|
|Contact details of provider:|| Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.|
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