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    Government budget deficits in large open economies

    Buiter, W. and Sibert, Anne (2011) Government budget deficits in large open economies. Working Paper. Birkbeck, University of London, London, UK.

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    Abstract

    Large and growing levels of public debt in the United States, United Kingdom, Japan and the Euro Area raise new interest in the cross-country effects of a large open economy's deficits. We consider a dynamic optimising model with costly tax collection and exogenously given public spending and initial debt. We ask whether the externalities associated with an individual country's deficits are positive or negative. We characterise the path of taxes in the Nash equilibrium where policy makers act nationalistically and compare this outcome to the global optimal outcome.

    Metadata

    Item Type: Monograph (Working Paper)
    Additional Information: JEL classification: E62, F42, H21
    Keyword(s) / Subject(s): fiscal policy, international policy coordination, optimal taxation
    School: Birkbeck Schools and Departments > School of Business, Economics & Informatics > Economics, Mathematics and Statistics
    Depositing User: Sarah Hall
    Date Deposited: 06 May 2014 16:32
    Last Modified: 06 May 2014 16:32
    URI: http://eprints.bbk.ac.uk/id/eprint/9684

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