The course gives an overview of the international macroeconomic framework in which economic and social policy can operate. With this it builds on the general course on macroeconomics. Furthermore, it shows the constraints and possibilities for national economic and social policy for different policy fields, such as welfare policy, which are presented in other courses of the curriculum.
With increasing internationalisation and mobility of capital, politics are put under more and more pressure. Firms threaten to relocate; tax havens emerge in order to attract investors.
Different types of countries reacted differently to these international challenges. Some have entered tax competition to try to reduce effective tax rates in order to attract companies. Some have cut back on welfare arrangements in order to invest more into business; others have reduced the influence of the public sector. This course analyses whether countries should compete with regard to taxes, labour standards, regulatory norms, welfare expenditures and social provisions, and what the potential effects of such policy competition are. Will there be a race to the bottom or will other outcomes be more likely within Europe? We will analyse this problem under theoretical and empirical aspects.
At the end of the course the student is able to:
Lectures, tutorials and paper sessions.