Unilateral Tax Policy in the Open Economy

Miriam Kohl and Philipp Richter ()

VfS Annual Conference 2019 (Leipzig): 30 Years after the Fall of the Berlin Wall - Democracy and Market Economy from Verein für Socialpolitik / German Economic Association

Abstract: This paper examines the effects of unilateral tax policy in the open economy. We construct a general equilibrium trade model with heterogeneous agents allowing for country asymmetries. We find that in contrast to a symmetric country set-up the share of exporting firms is endogenous. We show that a unilateral increase in the tax rate affects the factor allocation in the regulating country and the trading partner country differently. We further derive the implications for aggregate income and inequality in both countries.

Keywords: International trade; Income inequality; Redistribution; Heterogeneous firms (search for similar items in EconPapers)
JEL-codes: F12 (search for similar items in EconPapers)
Date: 2019
New Economics Papers: this item is included in nep-opm, nep-pbe and nep-pub
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Citations: View citations in EconPapers (1)

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https://www.econstor.eu/bitstream/10419/203581/1/VfS-2019-pid-27721.pdf (application/pdf)

Related works:
Journal Article: Unilateral tax policy in the open economy (2023)
Working Paper: Unilateral Tax Policy in the Open Economy (2021)
Working Paper: Unilateral Tax Policy in the Open Economy (2021)
Working Paper: Unilateral tax policy in the open economy (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:vfsc19:203581

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