Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/26158 
Year of Publication: 
2007
Series/Report no.: 
CESifo Working Paper No. 2113
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
We extent a solvable version of the core-periphery agglomeration model to four countries located in two regions. The paper shows that there might still be a race to the bottom in capital income tax rates despite agglomeration rents earned by the mobile factor. We find that intra-regional tax competition is detrimental from a welfare perspective and that tax harmonisation unambiguously makes both countries in the core region better off.
Subjects: 
tax competition
economic geography
race to the bottom
JEL: 
F12
H87
Document Type: 
Working Paper
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