Project description
A closer look at the impact of globalisation on inequality
The reality of financial globalisation and its intricate relationship with wealth inequality has become increasingly evident in our world. Who gains the most from this global wealth shift? The ERC-funded TUMAG project will answer this question. It will study why different social groups benefited from financial globalisation since the 1980s, and what would have happened if countries had chosen tax harmonisation over competition. This research promises to provide clarity by creating comprehensive statistics of global asset ownership and assessing the impact of international tax competition on inequality. It promises to be a compelling journey into the heart of economic coordination and its consequences. Ultimately, TUMAG seeks to redefine our perspective on international economic coordination.
Objective
Which social groups have most benefitted from financial globalization since the 1980s? How would inequality have evolved if, instead of tax competition, countries had chosen tax harmonization? The goal of this project is to address these questions in a unified framework and using new data. This proposal builds on my previous work and consists of two parts.
First, I will create prototype Global Flows of Funds: comprehensive statistics of the ownership of global assets by country of the owner and wealth group (e.g. amount of UK real estate owned by US households in the top 1% of the wealth distribution). Current macroeconomic and inequality data do not indicate which groups of the population own external assets in different countries. To remedy this, I will generalize my earlier work on the size and distribution of offshore wealth to all external assets, leveraging recent major improvements in global wealth data. The resulting database will provide a direct measure of the share of foreign assets in the portfolios of different wealth groups (e.g. fraction of the wealth of the US top 1% invested in foreign assets), bridging the gap between the study of inequality and financial globalization.
Second, using these Global Flows of Funds, I will estimate the effect of international tax competition on inequality. I will first provide a comprehensive quantification of the rise of international fiscal externalities since the 1980s, i.e. the extent to which residents of a given country have increasingly been subject to taxation in other countries (e.g. tax havens). Using multi-country models of wealth accumulation with heterogeneous agents calibrated using Global Flow of Funds data and other sources, I will then simulate the counterfactual evolution of inequality under different regimes of international tax coordination (e.g. full tax harmonization) since 1980. The ultimate objective is to renew thinking about the future of international economic coordination.
Fields of science (EuroSciVoc)
CORDIS classifies projects with EuroSciVoc, a multilingual taxonomy of fields of science, through a semi-automatic process based on NLP techniques.
CORDIS classifies projects with EuroSciVoc, a multilingual taxonomy of fields of science, through a semi-automatic process based on NLP techniques.
- natural sciencescomputer and information sciencesdatabases
- social sciencessociologygovernancetaxation
- social sciencessociologyglobalization
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Keywords
Programme(s)
- HORIZON.1.1 - European Research Council (ERC) Main Programme
Funding Scheme
HORIZON-ERC - HORIZON ERC GrantsHost institution
75014 Paris
France
The organization defined itself as SME (small and medium-sized enterprise) at the time the Grant Agreement was signed.