This paper addresses arguments that a system of fiscal insurance between member states of the European Union is needed to act in replacement of nominal exchange rate flexibility as an automatic stabilizer under monetary union. Many authors have argued or assumed that asymmetric real...

Models of international tax competition typically assume the existence of a benevolent government. This paper presents a model which integrates the view of government as source of inefficiency with an analysis of distorting taxes on capital investment, savings and labor income in a common...