This paper analyses the problem of designing macroeconomic stabilization policies within the European Monetary Union (EMU) as a dynamic game between a centralized monetary authority, the European Central Bank (ECB), and national fiscal policy makers. Non-cooperative feedback Nash equilibrium and...

The combination of discretionary montetary policy, labor-market distortions and nominal wage rigidity yields an inflation bias as monetary policy tries to exploit nominal wage contracts to address labor-market distortions. Although an inflation target eliminates this inflation bias, it creates a...

This paper concerns international coordination of environmental taxation. The main contribution of the paper is to provide a frame-work for dynamic cost benefit analysis of environmental tax reforms in a global economy with transboundary environmental problems. We show that the welfare effects...

Some governments have recently called for international accords restricting the use of preferential taxes targeted to attract mobile tax bases from abroad. Are such agreements likely to discourage tax competition or conversely cause it to spread? We study a general model of competition for...

We study the choice of club membership, when member-countries' national governments set their tax policies non-cooperatively. Federal policy (in the form of club membership) has a higher constitutional status than national policies (in the form of income tax rates). This allows federal policy to...

Should a subset of member states of a federation be allowed to form a sub-union on some policy issue? When centralization is not politically feasible, allowing an enhanced cooperation agreement among a subset of countries permits the latter to gain benefits which would otherwise be lost....

We describe a model of international, multidimensional policy coordination where countries can enter into selective and separate agreements with different partners along differentpolicy dimensions. The model is used to examine the implications of negotation tie-in - the requirement that...

This paper examines policy centralization outcomes in a two-jurisdiction, political economy model of public good provision choices with heterogeneous policy preferences and interjurisdictional policy spillovers, under alternative democratic choice procedures, namely, direct democracy and...

In this paper, we analyze coordination of macroeconomic stabilization policies within the EMU by focusing, in a dynamic set-up, on asymmetries, externalities, and the existence of a multi-country context. We study how coalitions among fiscal and monetary authorities are formed and what are their...

As economic integration within the European Union (EU) progresses, the interactions between the tax systems of the Member States are of growing importance. Member State tax policies can have spillover effects on other Member States and differing abilities to provide net fiscal benefits to...