Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/96187
Authors: 
Savvidis, Charalampos
Year of Publication: 
2011
Citation: 
[Journal:] SPOUDAI - Journal of Economics and Business [ISSN:] 2241-424X [Volume:] 61 [Year:] 2011 [Issue:] 1/2 [Pages:] 80-117
Abstract: 
In the present work we try to find out whether the existence of positive international externalities generates an incentive for cooperation between governments and if the adoption of a transfer payments scheme moderates that intensive. We adopt a simple economic model incorporating the international linkage of national economies. Utility proves always to be higher when countries cooperate than when they play Nash to each other. We then add a transfer payment scheme and prove it intensifies the intensive to cooperate, since a moral hazard problem arises on the top of the free riding problem.
Subjects: 
Optimal Taxation
International Policy Coordination
Production Externalities
Foreign Aid
Intertemporal Choice
JEL: 
H23
F35
F42
Document Type: 
Article

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