We consider a general control problem with two types of optimal regime switch. The first one concerns technological and/or institutional regimes indexed by a finite number of discrete parameter values, and the second features ecological-like regimes relying on given threshold values for given...

This paper solves a second-best problem where a government has in particular to choose whether to tax financial inflows (capital controls) or not, and when. A multi-stage optimal control technique is used to this end. First, it is shown that it is optimal to switch in finite time from capital...

In this paper, we consider a two-country model based on Svensson (1989) in order to analyze how fiscal harmonization impacts on economic growth and welfare through its effects on agents portfolio decisions in an uncertain world. We derive the conditions under which fiscal harmonization proves to...

The aim of the paper is to evaluate the welfare gains from financial integration for developing and emerging economies. To do so, we build a stochastic endogenous growth model for a small open economy that can (i) borrow from the rest of the world, (ii) invest in foreign assets, and (iii)...