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4 years ago

Global tax competition worsens unemployment in open economies.

SSRN Electronic Journal
Fiscal Policy, Economic Integration and Unemployment
Wolfgang Eggert, Laszlo Goerke

Paper Summary

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The article examines how government decisions on taxes and wages affect unemployment in an economy with global mobility. When firms can move internationally, labor market issues become more important. This suggests that domestic labor market improvements are crucial when tax bases are global.