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This paper provides overview of recent work on migration and welfare state tax policies: 1. I survey the literature on the tax burden of migration. 2. I empirically identify the differential effect of the generosity of the welfare state on the skill composition of immigrants across the two...
Persistent link: https://www.econbiz.de/10012459315
We develop a stylized EU-type model of a union consisting of rich, capital-abundant and high productivity countries, and poor, capital-scarce and low productivity countries. We address two main issues: the efficiency of tax competition and the effect of factor mobility on the size of the welfare...
Persistent link: https://www.econbiz.de/10012459379
In this paper, we review three branches of theoretical literature on financial crises. The first one deals with banking crises originating from coordination failures among bank creditors. The second one deals with frictions in credit and interbank markets due to problems of moral hazard and...
Persistent link: https://www.econbiz.de/10012459991
Oates reminds us that tax competition among localities in the presence of capital mobility, may lead to inefficiently low tax rates (and benefits). In contrast, the Tiebout paradigm suggests that tax competition yields an efficient outcome, so that there are no gains from tax coordination. This...
Persistent link: https://www.econbiz.de/10012461987
The paper tests three hypotheses concerning foreign equity investment in the presence of liquidity risk. First, the FDI-to-FPI price differential is negatively related to liquidity risk (the "Price Discount Hypothesis"). The idea is that market participants do not know whether the FDI investor...
Persistent link: https://www.econbiz.de/10012462005
We survey several mechanisms that explain the composition of international capital flows: foreign direct investment, foreign portfolio investment and debt flows (bank loans and bonds). We focus on information frictions such as adverse selection and moral hazard, and exposure to liquidity shocks,...
Persistent link: https://www.econbiz.de/10012462165
It is often argued that tax competition may lead to a "race to the bottom". Such a race may hold indeed in the case of the pure case of factor mobility (such as capital mobility). However, in this paper we emphasize the unique feature of labor migration, that may nullify the "race to the bottom"...
Persistent link: https://www.econbiz.de/10012462431
economy-wide sales of external assets. Consistent with our theory, we find that the predicted liquidity shock has a strong …
Persistent link: https://www.econbiz.de/10012462924
Finally, we analyze a risk-diversification model, where bond holdings hedge real exchange rate risks, while equities hedge non-financial income fluctuations. An equity home bias emerges as a calibratable equilibrium outcome
Persistent link: https://www.econbiz.de/10012463050
We develop a dynamic politico-economic theory of welfare state and immigration policies, featuring three groups of …
Persistent link: https://www.econbiz.de/10012463052