I discuss a dynamic version of the Zodrow-Miezskowski model, where world capital supply is not fixed. The time horizon of the welfare maximizing government is assumed to be infinite whereas the household sector is designed according to the two-period overlapping-generations model. Thus social...

I discuss a dynamic version of the Zodrow-Miezskowski model, where world capital supply is not fixed. The time horizon of the welfare maximizing government is assumed to be infinite whereas the household sector is designed according to the two-period overlapping-generations model. Thus social...

This paper compares and extends the tax competition analysis of ZODROW and MIESZKOWSKI (1986) and OATES and SCHWAB (1991, 1988). In a dynamic model of a small open economy we show that the efficiency of the tax instruments used to finance productive infrastructure depends on technical properties...