At borders where rich and poor countries meet, services prices differ hugely. In principle, price differentials could be exploited to mutual benefit, offering improved job opportunities to the poor as well as better shopping opportunities to the rich. However, cross-border shopping is often...

We analyse optimal environmental policies in a market that is vertically differentiated in terms of the energy efficiency of products. Considering energy taxes, subsidies to firms for investment in more eco-friendly products, and product standards, we are particularly interested in how...

In this note, we show that labour market integration can be a double-edged sword. In the presence of local human capital externalities, integration and the ensuing agglomeration of skilled labour can cause a decline in human capital and the total wage sum (net of education costs). In particular,...

The paper presents a model of two countries competing for the international pool of talented students from the rest of the world. To relax tuition-fee competition, countries differentiate their education systems in equilibrium. While one country offers high education quality at high charges for...

In this paper, we analyse the role of mobility in tax and subsidy competition. Our primary result is that increasing "relocation" mobility of firms leads to increasing "net" tax revenues under fairly weak conditions. While enhanced relocation mobility intensifies tax competition, it weakens...

We analyse how institutional and political decisions are intertwined. Citizens who differ in their mobility and ability vote first on labour market integration and afterwards on education policy. The institutional decision on integration influences the succeeding education policy. More...