Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/229524
Authors: 
Janeba, Eckhard
Schulz, Karl
Year of Publication: 
2020
Series/Report no.: 
CESifo Working Paper No. 8706
Abstract: 
We develop a theory of economic disintegration with both endogenously formed tax and trade policies. We show very generally that, contrary to conventional wisdom, a country’s disintegration from an integrated area leads to a deeper integration inside the area. Similarly, the departure of a country from a customs union lowers tariffs world-wide. Moreover, we introduce international firm mobility and non-cooperative business tax policies into the multi-country, multi-sector general equilibrium trade model of Melitz and Ottaviano (2008). We address the model-inherent dimensions of economic disintegration, such as tariffs, non-tariff barriers, the harmonization of production standards and regulations, business frictions, as well as household migration and analyze their effects on the domestic tax policies of asymmetric countries.
Subjects: 
trade policy
tax/subsidy competition
oligopolistic markets
economic integration
JEL: 
F13
F15
F22
F53
H25
H73
Document Type: 
Working Paper

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