Competitive tax reforms in a monetary union with endogenous entry and tradability
Aurélien Eyquem and
European Economic Review, 2017, vol. 98, issue C, 126-143
We quantify the effects of competitive tax reforms within a two-country monetary union model with endogenous entry and endogenous tradability. As expected, their effects on output, consumption, hours worked and the terms of trade are positive. Extensive margins provide additional transmission mechanisms that turn the response of foreign output from negative to positive and yields larger aggregate welfare gains compared to alternative models. These positive spillovers are due to the positive effect of the reform on variety creation in both countries and change our vision of this type of reform from beggar-thy-neighbour to prosper-thy-neighbour.
Keywords: Competitive tax reforms; Endogenous tradability; Endogenous varieties; Monetary union; Taxes; Fiscal devaluations (search for similar items in EconPapers)
JEL-codes: E32 E52 F41 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
Full text for ScienceDirect subscribers only
Working Paper: Competitive tax reforms in a monetary union with endogenous entry and tradability (2017)
Working Paper: Competitive Tax Reforms in a Monetary Union with Endogenous Entry and Tradability (2017)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:eee:eecrev:v:98:y:2017:i:c:p:126-143
Access Statistics for this article
European Economic Review is currently edited by T.S. Eicher, A. Imrohoroglu, E. Leeper, J. Oechssler and M. Pesendorfer
More articles in European Economic Review from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().