Artikel

Tax shocks, sunspots and tax evasion

This paper shows that an increase in corporate/labor/income tax rates may push an economy with tax evasion into an expansionary pattern, under increasing returns to scale. These effects would be reversed when the steady state is saddle-path stable. This model does not undertake a full identification. The interesting feature of our results is that fiscal policy in an economy with a significant underground sector may provide inadvisable outcomes. Thus, tax policies can generate counterproductive results in an economy characterized by existence of aggregate increasing returns to scale and underground activities.

Language
Englisch

Bibliographic citation
Journal: The Open Economics Journal ; ISSN: 1874-9194h ; Volume: 3 ; Year: 2010 ; Pages: 14-24 ; Sharjah: Bentham Open

Classification
Wirtschaft
Subject
dynamic general equilibrium models
fiscal policy
tax evasion and underground activities
indeterminacy and sunspots

Event
Geistige Schöpfung
(who)
Busato, Francesco
Chiarini, Bruno
Marchetti, Enrico
Event
Veröffentlichung
(who)
Bentham Open
(where)
Sharjah
(when)
2010

DOI
doi:10.2174/1874919401003010014
Handle
Last update
10.03.2025, 11:44 AM CET

Data provider

This object is provided by:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.

Object type

  • Artikel

Associated

  • Busato, Francesco
  • Chiarini, Bruno
  • Marchetti, Enrico
  • Bentham Open

Time of origin

  • 2010

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