Register  |  Login  |  Inquiries  |  Sitemap |  
Advanced Search
Journal of Economic Integration 2017 December;32(4) :842-872.
International Tax Competition in the Global Economy

Boris Korneychuk 

National Research University Higher School of Economics, Saint-Petersburg, Russia
Corresponding Author: Boris Korneychuk ,Tel: +7 9214058701, Fax: 812 7143023, Email:
Copyright ©2017 Journal of Economic Integration
This study employs a Keynesian-type model of the global economy to investigate the impact of savings rate, openness, and population size on equilibrium tax rates and tax revenues in a world economy. Within the model, the marginal propensity to consume is represented by a matrix specifying each country’s income distribution among internal consumption, exports, and savings. This study reveals that equilibrium tax rates are higher in countries with a higher rate of savings, greater level of openness, and smaller population size. If an infinitely large number of identical and highly integrated competing countries exist, then a system with indirect taxation has a lower equilibrium tax rate and higher tax revenues than a system with direct taxation. If a country with direct taxation and a country with indirect taxation compete, then the latter country has an advantage.

JEL Classification
E12: Keynes; Keynesian; Post Keynesian
F15: Economic Integration
F41: Open Economy Macroeconomics
H21: Efficiency; Optimal Taxation
H87: International Fiscal Issues; International Public Goods
Keywords: Tax Competition | Global Economy | Keynesian Model | Tax Policy
Editorial Office
Center for Economic Integration, Sejong University, 209, Neungdong-Ro, Gwangjin-Gu,
Seoul, 05006, Korea
TEL : +82-2-3408-3338    FAX : +82-2-6935-2492   E-mail :,
Browse Articles |  Current Issue |  For Authors and Reviewers |  About
Copyright© by Center for Economic Integration.      Developed in M2PI