TY  - RPRT
        AU  - Eggert, Wolfgang
AU  - Goerke, Laszlo
        TI  - Fiscal Policy, Economic Integration and Unemployment
        PY  - 2003/Nov/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 937
        UR  - https://www.iza.org/publications/dp937
        AB  - In this paper fiscal policy is examined for an open economy characterised by unemployment
due to efficiency wages. We allow for capital and firm mobility in a model where the
government chooses the level of wage, source-based capital and profit taxation. The taxing
choices of governments are analyzed in scenarios which differ with respect to the constraints
imposed on the set of available taxes and on the mobility of firms. As a general result, the
welfare loss from labour market imperfections increases when tax bases become
internationally mobile, which suggests an increasing relevance of domestic labour-market
reforms when tax bases become global.
        KW  - optimal taxation
KW  - efficiency wages
KW  - unemployment
        ER  -