Beggar My Neighbour Policy
Definition of Beggar My Neighbour Policy: This is an economic policy that seeks to promote a country's economy at the expense of another country.
An obvious example, is the use of tariff barriers. A country may place tariff on imports to help promote local domestic industry. This may help local unemployment, but,it will be at the expense of the other country's export sector.
Some economists argue that imposing tariff's doesn't help the domestic economy, but, only certain sectors of the economy.
Beggar my neighbour policy could also be used with regard to exchange rates. For example, the US criticised China for having a low exchange rate, which made Chinese goods more competitive. They argued this increased Chinese growth at the expense of a US trade deficit.
Tax Competition and Beggar Thy neighbour.
Countries can cut corporation tax to attract more inward investment. This takes investment away from other countries and can create unwelcome to lower tax rates. More on tax competition