Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/229524 
Year of Publication: 
2020
Series/Report no.: 
CESifo Working Paper No. 8706
Publisher: 
Center for Economic Studies and Ifo Institute (CESifo), Munich
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
Appears in Collections:

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.