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Seigniorage, taxation and myopia in EMU

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  • Krichel, Thomas

Abstract

We examine fiscal policy coordination in a two-country world with two types of asymmetries. The first type of asymmetry is a difference in the efficiency of taxation systems, the second is a varying degree of myopia as represented by discount rates. We examine the conditions under which cooperation is beneficial for both countries and we examine how asymmetries affect the loss inflicted by discretion. Our results show that if asymmetries are too great, EMU has poor welfare properties.

Suggested Citation

  • Krichel, Thomas, 1993. "Seigniorage, taxation and myopia in EMU," MPRA Paper 4472, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:4472
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    References listed on IDEAS

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    1. Levine, Paul L & Pearlman, Joseph, 1993. "Optimal Tax Policy, Government Myopia and Insolvency," CEPR Discussion Papers 768, C.E.P.R. Discussion Papers.
    2. Maurice Obstfeld, 1989. "Dynamic Seigniorage Theory: An Exploration," NBER Working Papers 2869, National Bureau of Economic Research, Inc.
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    Keywords

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    JEL classification:

    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System

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