We examine whether discretionary government grants influence the location of new plants. Grants have a small effect in attracting plants to specific geographic areas, but their effectiveness increases with agglomeration externalities, measured by the number of other plants in that location in...

This paper analyses the development of taxes on corporate income in EU and G7 countries over the last two decades. We establish a number of stylised facts about their development. Tax-cutting and base-broadening reforms have had the effect that, on average across EU and G7 countries, effective...

What does financial globalization imply for the design of monetary policy? Does the case for price stability change in an environment of large cross country gross asset holdings? This paper is concerned with the effects of monetary policy under endogenous international portfolio choice and...

This paper develops a view of exchange rate policy as a trade-off between the desire to smooth fluctuations in real exchange rates so as to reduce distortions in consumption allocations, and the need to allow flexibility in the nominal exchange rate so as to facilitate terms of trade adjustment....

This paper presents a general approximation method for characterizing time-varying equilibrium portfolios in a two-country dynamic general equilibrium model. the method can be easily adapted to most dynamic general equilibrium models, it applies to environments in which markets are complete or...