Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/115361
Authors: 
Buiter, Willem H.
Sibert, Anne C.
Year of Publication: 
2015
Series/Report no.: 
Economics Discussion Papers 2015-59
Abstract: 
Large and growing levels of public debt in the United States, United Kingdom, Japan and the Euro Area raise new interest in the cross-country effects of a large open economy's deficits. The authors consider a dynamic optimising model with costly tax collection and exogenously given public spending and initial debt. They ask whether the externalities associated with an individual country's deficits are positive or negative. They characterise the path of taxes in the Nash equilibrium where policy makers act nationalistically and compare this outcome to the global optimal outcome.
Subjects: 
fiscal policy
international policy coordination
optimal taxation
JEL: 
E62
F42
H21
Creative Commons License: 
http://creativecommons.org/licenses/by/3.0/
Document Type: 
Working Paper

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