Optimal fiscal policy in an open economy with capital income shifting and consumer cross-border purchases

摘要: The paper presents a fiscal policy model integrating tax avoidance, the complexity of systems and solvency hypothesis within traditional framework competition. Furthermore, we take into account: taxation consumption, possibility capital income shifting foreign goods purchases (untaxed in destination country). We conclude that if is by no means unfettered equilibrium can be allocation efficient, provided marginal rate substitution between private public one. changes debt affect rates differently: positively for consumption negatively labor rate. change depends on level economic internalization. This approach especially useful during crisis applied to predict rates’ adjustment when bonds issuance decreases or accelerates.