International Finance

As a sub-category of Economics, the study of Finance analyses public revenue and spending from a macro-economic perspective. In keeping with the Institute’s focus, this subject considers primarily international issues. The following problems are of particular interest:

International Economic Implications of Taxation

• How is a country’s foreign account for goods and services influenced by national taxation policies?
• What are the implications of national tax policy for factor transfer to and from Germany?
• What influence does tax policy have on foreign direct investment in Germany?
• What is the effect of foreign tax policy on the domestic economy?
• How is German foreign trade influenced by tax policies in other countries?
• What consequences do tax policies abroad have on investment, employment and growth in Germany?
• How can German tax policy react to foreign tax policies?

International Comparison of Financial and Tax Systems

A comparison of national tax policy with tax systems abroad can provide extremely useful insights. For this reason the analysis of foreign tax systems is a core part of the Financial Studies area at the institute.

Concepts of Tax Policy in a globalised world economy

• Taxation on goods and services with regard to national and international standards
• Development and current state of European harmonisation of VAT and other consumer taxes
• Income (factor) taxation with regard to national and international standards
• Adaptation processes in European Factor Taxation
• Codex preventing unfair tax competition

Individual issues of international fiscal policy

• Competition versus coordination of fiscal policies
• Forms of international cooperation
• The Maastricht Treaty and the European Stability Pact
• Problems of jurisdiction between European and National levels
• The national and European redistribution of funds
• European and national policies on subsidies
• Problems with national and international pension provision

The impact of public taxation and spending on economies as a whole is determined by the reactions of those companies and households that are directly affected. For this reason, economic analyses must take into account the knowledge available on the behaviour of these parties. The Finance department is therefore reliant upon the competence in Business and Tax issues invested in the other areas of the institute.