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A Theory of Economic Disintegration

Eckhard Janeba () and Karl Schulz

VfS Annual Conference 2020 (Virtual Conference): Gender Economics from Verein für Socialpolitik / German Economic Association

Abstract: We develop a theory of economic disintegration that features both endogenously formed tax and trade policies. We show very generally that the economic disintegration of a country from an economic union leads to a deeper integration of international trade institutions. Moreover, we set up a multi-country, multi-sector general equilibrium trade model with internationally mobile firms. We address the key dimensions of economic disintegration, such as tariffs, non-tariff barriers, the harmonization of production standards and regulations, as well as household migration and analyze their effects on the domestic tax policies of asymmetric countries.

Keywords: Trade Policy; Tax/Subsidy Competition; Oligopolistic Markets; Economic Integration (search for similar items in EconPapers)
JEL-codes: F13 F15 F22 F53 H25 H73 (search for similar items in EconPapers)
Date: 2020
New Economics Papers: this item is included in nep-int
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Working Paper: A Theory of Economic Disintegration (2020) Downloads
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