International public goods revolutionize tax cooperation, unlocking massive welfare benefits.
The article explores how international cooperation on tax policies can benefit the global economy. By using a model of the world economy, the researchers found that when countries work together on tax issues, there can be significant welfare gains. These benefits are especially pronounced when considering the impact of international public goods. In this scenario, cooperation leads to higher welfare levels compared to non-cooperation, showing the importance of working together on tax matters for overall economic well-being.
