Arbeitspapier
The informal sector in contemporary models of the aggregate economy
I review a contemporary branch of the informal sector literature that focus on understanding the way firm behavior is affected by the presence of informality and how such distortions have an impact on aggregate variables. The authors in this group all make use of dynamic general equilibrium (DGE) models. I focus on models with heterogeneous firms and a cost of informality that is increasing with firm size: reducing informality entails a tradeoff because there are some distortions associated with the formal sector and some others with the informal. Quantitative evaluations of this tradeoff using these models show that, in general, reducing informality brings gains. In conclusion, substantial progress has been made in understanding informality and its consequences through the use of DGE models with heterogeneous firms. More research is needed to understand how informality affects the economy when other sources of heterogeneity are considered
- Sprache
-
Englisch
- Erschienen in
-
Series: Working Papers ; No. 2014-24
- Klassifikation
-
Wirtschaft
Informal Economy; Underground Economy
Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
Economic Growth and Aggregate Productivity: General
- Thema
-
informality
literature survey
dynamic general equilibrium
heterogeneous firms
distortions
productivity
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Leal, Julio
- Ereignis
-
Veröffentlichung
- (wer)
-
Banco de México
- (wo)
-
Ciudad de México
- (wann)
-
2014
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:45 MEZ
Datenpartner
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Objekttyp
- Arbeitspapier
Beteiligte
- Leal, Julio
- Banco de México
Entstanden
- 2014
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