There is a gap in the existing literature concerning the optimal degre of fiscal integration in a monetary union.
My research aims to investigate the interaction of capital income tax with the exchange rate policy in a world economy.
An important issue in this context is whether the introduction of a common currency in a union requires a coordination of fiscal policies between member countries. In such a world, countries can behave strategically by using both their tax and exchange rate policies in order to attract world resources.
To capture this element I will use a game theoretic approach in a general equilibrium framework.
This area of research seems very promising, especially now that international considerations have become increasingly relevant in the analysis and formulation of policy.