Macro Seminar: Paul Gomme, Concordia University

Speaker

Paul Gomme, Concordia University

Biography

Paul Gomme is a professor at Concordia University and a Research Fellow at CIREQ. Prior to these appointments, he served as a Senior Economic Advisor with the Federal Reserve Bank of Cleveland. He received his PhD in Economics from the University of Western Ontario. His research interests focus on business cycles, the effects of monetary and fiscal policy on the economy, the determinants of employment, and the effects of labor market policy on unemployment and labor market participation.

Event Details

Title: “Ramsey Tax Competition with Real Exchange Rate Determination”

Abstract: How should governments choose tax rates when they face competition from other jurisdictions? This question is answered by solving for the equilibrium of the game played between Ramsey planners in a two good, two country open economy macroeconomic model. There are five effects associated with implementing the Ramsey tax plan: tax distortion reduction; population size; debt revaluation; terms-of-trade; and strategic real exchange rate. This last effect is new to the literature and helps explain why the larger country initially sets a higher capital income tax rate than its smaller rival.