Arbeitspapier

Fiscal Policy, Economic Integration and Unemployment

In this paper fiscal policy is examined for an open economy characterised by unemployment due to efficiency wages. We allow for capital and firm mobility in a model where the government chooses the level of wage, source-based capital and profit taxation. The taxing choices of governments are analyzed in scenarios which differ with respect to the constraints imposed on the set of available taxes and on the mobility of firms. As a general result, the welfare loss from labour market imperfections increases when tax bases become internationally mobile, which suggests an increasing relevance of domestic labour-market reforms when tax bases become global.

Language
Englisch

Bibliographic citation
Series: CESifo Working Paper ; No. 1102

Classification
Wirtschaft
Subject
taxation
efficiency wages
unemployment

Event
Geistige Schöpfung
(who)
Eggert, Wolfgang
Goerke, Laszlo
Event
Veröffentlichung
(who)
Center for Economic Studies and ifo Institute (CESifo)
(where)
Munich
(when)
2003

Handle
Last update
10.03.2025, 11:43 AM CET

Data provider

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Object type

  • Arbeitspapier

Associated

  • Eggert, Wolfgang
  • Goerke, Laszlo
  • Center for Economic Studies and ifo Institute (CESifo)

Time of origin

  • 2003

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