Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/77669 
Year of Publication: 
2013
Series/Report no.: 
CESifo Working Paper No. 4256
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
This article studies the effects of tax competition on the provision of public goods under business risk and partial irreversibility of investment. As will be shown, the provision of public goods changes over time and also depends on the business cycle. In particular, under source-based taxation, public goods can be optimally provided during a downturn, in the short term. The converse is true during a recovery, when they are underprovided. In the long term however, tax competition does not affect capital accumulation and therefore, the provision of public goods.
Subjects: 
irreversibility
risk
short- and long-term effects
tax competition
JEL: 
H25
H32
Document Type: 
Working Paper
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