This is a note on corruption and underground economy in a Kaldor-type model of the business cycle. It appears that when the economy is booming and underground activities seek to enter the official economy, bureaucrats have the upper hand but until underground businesses cannot tolerate...

This paper argues the predictive power of the sectoral approach towards a quantity theory of credit is weak. A quantity theory of commercial-bank-seigniorage approach is proposed in its place. It suggests that the financial system may be held responsible for price and output fluctuations to the...

Contrary to what the literature on the linkage between debt accumulation and hidden economy suggests, this paper advocates that the two relationships, tax-hidden economy size and inflation-hidden economy size, have to be inverse because it is the relative, not the absolute hidden economy size...

This paper investigates the economic conditions under which the performance of a Judiciary does not impede non-coercive fair socioeconomic allocations under “Strotz-myopia” regarding the law variable, i.e. under a static view of it in an otherwise dynamic context. The law, here, is the...

This is a brief note maintaining that financial globalization has been faster than the integration of the remaining sectors of the world economy, thus encouraging wealth inequality, under-production, and under-consumption in line with Say's Law. Financial investment has become more profitable...

Standard Macroeconomics treats animal spirits as a source of uncertainty disturbing rational otherwise expectations. But, Keynesian animal spirits ensue from suboptimal emotional response to socioeconomic status change beyond matters of uncertainty. This paper identifies such spirits with the...

A model is presented in which one firm borrows from one bank with a positive supply curve of loans. The bank monitors firm's output, which firm produces output underground too, in order to avoid this monitoring and minimize its marginal expenditure on loans by defaulting. The model incorporates...

This paper maintains that the durable-goods character of loans enables the forward shift of bank indirect taxes à la Coase (1972), increasing thereby the money multiplier and reducing the equity-lending ratio regardless bank industry structure. Consequently, policymakers may use such taxes...

This paper demonstrates theoretically that a profit tax does not affect the distribution of the firm's operations between the official and the underground economy. Or, if the firm was initially operating only officially, direct taxation of its business would not be a reason to go underground....