Supply-Side Spillovers, International Fiscal Policy Coordination and the Economic Convergence of Regions

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Project objective

Research objectives and contentThe economic effects of increasing integration among national markets on the performance of EC member states and their impact on national fiscal policies are a highly discussed topic under the headings globalisation" and "tax competition". The aim of the project is to transfer dynamic game theoretic techniques, which have been developed for short-run demand-side oriented analyses of fiscal and monetary coordination, to a supply side oriented framework of regional growth. Investigating single countries, endogenous growth theory has shown that the structure of an economy's public sector is an important matter for its long-run performance. This setting will be extended to a multi-region model in which the long-run effects of competition between regions in taxation and infrastructure will be analysed. Using recently developed techniques to examine adjustment dynamics in models of economic growth the project investigates the impact of possible policy outcomes on the process of economic convergence among states and regions in Europe.Training content (objective, benefit and expected impact)I will learn analytical methods of dynamic game theory for handling problems like reputation, commitment and time-consistency of policy decisions. Secondly, I will train recently developed computational methods to estimate the effects of possible policy outcomes on the convergence of European regions quantitatively.Links with industry / industrial relevance (22)"

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Participants

• University of Cambridge · CambridgeCoordinatorUnited Kingdom

Links

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