Virtually all governments seek to fight tax evasion exploiting better and better technological devices. Despite of that the phenomenon still remains alive and kicking all around the world. The foregoing naturally arises the question in the title. This paper develops a simple model to provide...

We develop a general theoretical model to compare two different policymakers both facing tax evasion. Policymakers differs in that they aim to maximize either the fiscal revenues (<InlineEquation ID="IEq1"> <EquationSource Format="TEX">$$T$$</EquationSource> </InlineEquation>) as in a social-democracy as, e.g., Sweden, or the GDP as in a capitalistic country as, e.g., the USA. Both...</equationsource></inlineequation>

Underground activities affect crucial fiscal ratios generating “gaps” both in government revenues and in national accounts. I address this topic exploiting the peculiarities of the Italian situation. First, I describe the pros and cons of the Italian method to estimate the (non trivial share...

As recently suggested, the shadow economy and its determinants (taxation, regulations, corruption, etc.) are linked such that just two stable equilibria are possible. In the good one there is a small hidden sector, large fiscal revenues and honest/appreciated institutions. The other (bad)...

Persistent and widespread psychological attitudes distort both the subjective probability of future economic events and their retrospective interpretation. It could lead to a systematic gap between (over critic) judgments and (over confident) expectations - the “survey forecast error”. When...

This paper investigates the usefulness of Italian consumer surveys as estimation and forecasting tool over the period 1982-2003. To this end, standard consumption equations are estimated and then compared, in terms of in-sample and out-of-sample predictive ability, with corresponding models...

<i> Cosa sappiamo dell’economia sommersa in Italia al di là dei luoghi comuni? Alcune proposizioni empiricamente fondate </i> (di Maurizio Bovi e Laura Castellucci) - ABSTRACT: It is commonly thought that the underground economy is larger in Italy than in most other developed countries and that it...

To learn the people's expectations formation process, we examine shocks and survey expectations on individual and aggregate income. Data show that shocks have permanent effects on both expectations, which do not diverge systematically because agents revise forecasts. Actually, only expectations...

In many countries the shadow employment has a very high priority among policymakers. A new time series for this component of the labour market has been recently released by the Italian institute of statistics. Taken together they give the motivation and the occasion for a fresh analysis of the...