Size, Trend, and Policy Implications of the Underground Economy

Arbeitspapier

We study the underground economy in a dynamic and stochastic general equilibrium framework. Our model combines limited tax enforcement with an otherwise standard two-sector neoclassical stochastic growth model. The Bayesian estimation of the model based on Italian data provides evidence in favor of an important underground sector in Italy, with a size that has steadily increased over the whole sample period. We show that this pattern is due to a persistent increase in taxation. Fiscal policy experiments suggest that a moderate tax cut, along with a stronger effort in the monitoring process, causes a sensitive reduction in the size of the underground economy and positive stimulus to the regular sector that jointly increase the total fiscal revenues.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: Quaderni - Working Paper DSE ; No. 818

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Studies of Particular Policy Episodes ; One, Two, and Multisector Growth Models ; Economywide Country Studies: Europe

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Orsi, Renzo ; Raggi, Davide ; Turino, Francesco
• Ereignis: Veröffentlichung
• (wer): Alma Mater Studiorum - Università di Bologna, Dipartimento di Scienze Economiche (DSE)
• (wo): Bologna
• (wann): 2012

Weitere Informationen

• DOI: doi:10.6092/unibo/amsacta/4198
• Handle: http://hdl.handle.net/10419/159657
• Letzte Aktualisierung: 10.03.2025, 11:41 MEZ