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A Repeated Interactions Model of Tax Competition

Author

Listed:
  • Cardarelli, R.
  • Taugourdeau, E.
  • Vidal, J.-P.
Abstract
Models of tax competition usually assume a single period framework. This paper sets up a repeated interactions model of tax competition, and establishes conditions under which fiscal policy harmonization can result from repeated interaction between governments. It is shown that fiscal policy harmonization can not prevail when regional asymmetries are too strong. In such a case, the only way out is to set up a central fiscal authority.

Suggested Citation

  • Cardarelli, R. & Taugourdeau, E. & Vidal, J.-P., 1999. "A Repeated Interactions Model of Tax Competition," G.R.E.Q.A.M. 99a34, Universite Aix-Marseille III.
    • Handle: RePEc:fth:aixmeq:99a34
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    Keywords

    TAXATION ; FISCAL POLICY ; ENTERPRISES;
    All these keywords.

    JEL classification:

    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism

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