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Employment Subsidy with Capital Mobility

Manuel Leite-Monteiro, Maurice Marchand () and Pierre Pestieau ()
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Maurice Marchand: CORE and IAG, UniversitÈ catholique de Louvain

Journal of Public Economic Theory, 2003, vol. 5, issue 2, 327-344

Abstract: Most models of tax competition assume full employment. Yet, actually one often observes that fiscal competition, particularly when it is aimed at attracting investment, is motivated by the concern of fighting unemployment and enhancing job creation. The present paper considers a multicountry model with capital mobility and unemployment. Fiscal policy has two opposing objectives: financing unemployment insurance and increasing employment. In each country there is a majority vote on this policy. Copyright 2003 Blackwell Publishing Inc..

Date: 2003
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