Implicit Tax Co-Ordination Under Repeated Policy Interactions

22 Pages Posted: 26 Jan 2004

See all articles by Marco Catenaro

Marco Catenaro

European Central Bank (ECB)

Jean-Pierre Vidal

European Central Bank (ECB)

Date Written: September 2003

Abstract

In the context of a stylised game theoretical framework of capital tax competition, we show that when repeated policy interactions are associated to a systematic punishment of the deviating policymaker, a co-ordinated outcome can be the solution to the non co-operative tax game. This result suggests that explicit forms of policy co-ordination, such as a centralised tax authority, could in fact be largely unnecessary.

Keywords: Policy Co-ordination, International Fiscal Issues

JEL Classification: E61, H87

Suggested Citation

Catenaro, Marco and Vidal, Jean-Pierre, Implicit Tax Co-Ordination Under Repeated Policy Interactions (September 2003). ECB Working Paper No. 259, Available at SSRN: https://ssrn.com/abstract=457527 or http://dx.doi.org/10.2139/ssrn.457527

Marco Catenaro (Contact Author)

European Central Bank (ECB) ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany

Jean-Pierre Vidal

European Central Bank (ECB) ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany

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