Government budget deficits in large open economies

Arbeitspapier

Large and growing levels of public debt in the United States, United Kingdom, Japan and the Euro Area raise new interest in the cross-country effects of a large open economy's deficits. We consider a dynamic optimising model with costly tax collection and exogenously given public spending and initial debt. We ask whether the externalities associated with an individual country's deficits are positive or negative. We characterise the path of taxes in the Nash equilibrium where policy makers act nationalistically and compare this outcome to the global optimal outcome.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 3476

Classification and Topics

• Classification: Wirtschaft ; Fiscal Policy ; International Policy Coordination and Transmission ; Taxation and Subsidies: Efficiency; Optimal Taxation
• Subject: fiscal policy ; international policy coordination ; optimal taxation ; Haushaltsdefizit ; Offene Volkswirtschaft ; Finanzpolitik ; Steuerpolitik ; Internationale wirtschaftspolitische Koordination ; Optimale Besteuerung ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Buiter, Willem H. ; Sibert, Anne C.
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2011

Further information

• Handle: http://hdl.handle.net/10419/46459
• Last update: 10.03.2025, 11:44 AM CET