We analyze the relation between tax enforcement, aggregate output and government revenue when imperfectly competitive firms evade a specific output tax. We show that aggregate output decreases with tax enforcement. Government revenue increases with enforcement when the tax is low. When the tax...

Chang, Lai and Chang (1999) use a micro-founded short-term macroeconomic model, with an imperfectly competitive market, to analyze, among other issues, the relationship between tax evasion and tax revenue. They show that this relationship depends upon the market structure. In particular, when...

Chang, Lai and Chang (1999) use a micro-founded short-term macroeconomic model, with an imperfectly competitive market, to analyze, among other issues, the relationship between tax evasion and tax revenue. They show that this relationship depends upon the market structure. In particular, when...