The entry of a low-wage country into world economy with preexisting wage differentials puts the gains from trade in former and then medium-wage under pressure. If negotiations over formation free area cover international transfers, there is strong presumption that they bring about global compensation if necessary. In absence by contrast, not compensated when causes reduction its trade, it may e...

Theory predicts that strategically-determined tax rates induce negative externalities across countries in relative prices, the wealth distribution and tax revenue. This paper studies the interaction of these externalities in a dynamic, general equilibrium environment and its effects on quantitative outcomes of tax competition in one-shot games over capital income taxes between two governments t...