Equilibrium implications of fiscal policy with tax evasion: A long run perspective

This paper studies equilibrium effects of fiscal policy within a dynamic general equilibrium model where tax evasion and underground activities are explicitly incorporated. In particular, the paper analytically measures (both from a theoretical and empirical viewpoint) of how much the underground sector mitigates the distortionary impact of fiscal policies, while lessening the drop (rise) of aggregate production after contractionary (expansionary) tax shifts.

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Year of publication:	2012
Authors:	Busato, Francesco ; Chiarini, Bruno ; Rey, Guido M.
Published in:	International Review of Law and Economics. - Elsevier, ISSN 0144-8188. - Vol. 32.2012, 2, p. 197-214
Publisher:	Elsevier
Subject:	Two-sector dynamic general equilibrium models \| Fiscal policy \| Tax evasion and underground activities

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Type of publication:	Article
Classification:	E32 - Business Fluctuations; Cycles ; E13 - Neoclassical ; H20 - Taxation, Subsidies, and Revenue. General ; E26 - Informal Economy; Underground Economy
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10010571741