Mitchell Kane (Virginia) presents Risk and Redistribution in Closed and Open Economies today at Michigan as part of its Tax Policy Workshop Series.  Here is part of the Introduction:

This paper has four parts. In Part I first provide an abstract description of the phenomena of divergence and retention and then explain how these phenomena relate to ongoing debates regarding tax and risktaking. In Part II I discuss the degree to which actual international tax instruments manifest these phenomena. In Part III I show why divergence and retention are normatively problematic and suggest that potential remedies will best proceed through multilateral efforts to provide more generous loss offsets. In Part IV I claim that to the extent the phenomena of divergence and retention continue to manifest themselves they should be taken into account in other important policy debates. In particular, I suggest that there are likely important ramifications for the debate regarding the efficacy of governmental efforts to encourage innovation through the tax system and the debate over whether it is better to relieve international double taxation through a foreign tax credit or through an exemption of foreign source income.