In the context of a stylised game theoretical framework of capital tax competition, we show that when repeated policy interactions are associated to a systematic punishment of the deviating policymaker, a co-ordinated outcome can be the solution to the non co-operative tax game. This result suggests that explicit forms of policy co-ordination, such as a centralised tax authority, could in fact be largely unnecessary.

Policy towards asylum seekers has been a controversial topic for more than a decade. Rising numbers of asylum applications have been met with ever-tougher policies to deter them. Following a period of policy harmonisation, the EU has reached a crucial stage in the development of a new Common European Asylum System. This paper seeks to shed light on what form this should take. It summarises the development of policy to date and it argues that these policies have been too tough, even from the point of view of EU citizens. Using an economic framework, it examines scenarios with different degrees of policy harmonisation and integration among EU countries. Finally, it argues that there is an important role for enhanced burden-sharing arrangements.

The ability of fiscal policies to smooth macroeconomic fluctuations under the constraints imposed by the Maastricht Treaty is at the heart of the current policy debate in Europe. A two-country intertemporal stochastic general equilibrium model is used in order to evaluate the efficiency of fiscal policy. First, it reveals the importance of the nature of the shocks hitting European countries : asymmetrical shocks actually strengthen the national fluctuations. Then, constraints on public deficit imposed by the Maastricht Treaty limit the ability of national governements to stabilize their économies. Furthermore, they can lead the european countries to adopt pro-cyclical budget rules.