@techreport{NBERw4086,
 title = "The International Transmission of Tax Policies in a Dynamic World Economy",
 author = "Stephen J. Turnovsky and Marcelo Bianconi",
 institution = "National Bureau of Economic Research",
 type = "Working Paper",
 series = "Working Paper Series",
 number = "4086",
 year = "1993",
 month = "June",
 URL = "http://www.nber.org/papers/w4086",
 abstract = {This paper analyzes the international transmission of tax shocks in a two-country infinite-horizon representative agent framework. In analyzing such shocks, the viability of the underlying tax regimes, arising from the arbitrage conditions characterizing equilibrium in a perfect world capital market, is emphasized. Conditions for both short-run and long-run viability are derived, and the two polar regimes of source-based and residence-based taxation discussed. In general, we find the fanner more likely to satisfy the viability conditions, than the latter. With equity financing, the long-run viability of residence-based taxation is likely to require the harmonization of tax and/or dividend policy. The main features of the dynamic adjustment paths following a tax increase are characterized.},
}