Is Fiscal Cooperation always Sustainable when Regions Differ in Size? Lessons for the EMU

Emmanuelle Taugourdeau

Annals of Economics and Statistics, 2004, issue 75-76, 11-36

Abstract: This paper investigates the sustainability of fiscal co-ordination between two regions according to three criteria of co-ordination: tax harmonization, fiscal cooperation and bargaining. We show that in a two-region model in which regions differ in size, bargaining is the only sustainable co-ordination policy when trigger types strategies are implemented. The sustainability of cooperative fiscal policy or tax harmonization depends on the degree of difference in regions' size. When this difference is large, such co-ordinated policies are not sustainable.

Date: 2004
References: Add references at CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://www.jstor.org/stable/20079093 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:adr:anecst:y:2004:i:75-76:p:11-36

Access Statistics for this article

Annals of Economics and Statistics is currently edited by Laurent Linnemer

More articles in Annals of Economics and Statistics from GENES Contact information at EDIRC.
Bibliographic data for series maintained by Secretariat General () and Laurent Linnemer ().