"Decentralization when tax bases are interdependently mobile: Shared or exclusive tax bases?" (with M.L. Breuillé), 2022.
Abstract:
Our paper analyses the issue of tax base assignment of two mobile and interdependent tax bases that generate tax externalities, in a two-tier setting with multiple states and local jurisdictions. We compare three fiscal architectures: i) centralization, ii) partial decentralization with shared tax bases and iii) partial decentralization with exclusive tax bases. The interdependence between the two tax bases generates cross-base tax externalities and reinforces the standard same-base tax externalities. It results in partial decentralization with exclusive tax bases differing from other fiscal architectures in that tax externalities can lead to an inefficiently high tax rate at either tier. While there is always a level of expenditure decentralization such that partial decentralization with shared tax bases dominates full centralization, this is no longer the case with exclusive tax bases, which even leads to the lowest welfare for a su¢ ciently high degree of substitutability between the tax bases.
"Interactions des politiques monétaire et budgétaires: évaluation dans un cadre nouveau keynésien", EconomiX working paper n°2006-4, University of Paris X – Nanterre, 2006.
Abstract:
In this paper, I focus on the interactions between monetary and fiscal policies in a two-country model of a monetary union. I develop a New-Keynesian model to analyse different combinations of fiscal and monetary policies. Using simulations, I show that a monetary policy decided at the union level, combined with active national fiscal policies, induce a significant increase of welfare. The magnitude of this effect depends on the type of heterogeneity between the two countries.