This paper reviews recent theories that address cooperation and coordination issues in the conduct of fiscal policy in an economic union. This is done by discussing these issues in a complete, logically consistent framework that connects the various problems concerning fiscal policy in an...

The answer to this question is "yes". We examine noncooperative and cooperative equilibria under perfect capital mobility. To this end, we develop a two-country optimal growth model with endogenous national fiscal policies. The channel for interdependence is distortionary income taxes.

The answer to this question is "yes". We examine noncooperative and cooperative equilibria under perfect capital mobility. To this end, we develop a two-country optimal growth model with endogenous national fiscal policies. The channel for interdependence is distortionary income taxes.

This paper reviews recent theories that address cooperation and coordination issues in the conduct of fiscal policy in an economic union. This is done by discussing these issues in a complete, logically consistent framework that connects the various problems concerning fiscal policy in an...