In this paper, I investigate to what extent the cross-country variation in nominal interest rates can be explained as being due to governments' optimal response to economic conditions such as tax collection costs, tax evasion and government consumption needs. In particular, I study the effects...

This paper presents an exploratory analysis of the potential impacts of the Lei do Empreendedor Individual (Individual Entrepreneur Law). We intend to present evidence that helps clarify, albeit only partially, whether the policy was successful in promoting: i) micro-entrepreneurship in Brazil;...

In much of the literature on economic development, sustained economic growth is expected to be accompanied by several interrelated processes of structure change, which involve a shift in economic activities from "traditional"/agricultural/informal to "modern"/industrial/formal sectors. Such...

Informality has long been a salient phenomenon in developing country labor markets, thus has been addressed in several theoretical and empirical research. Turkey, given its economic and demographic dynamics, provides rich evidence for a growing, heterogeneous and multifaceted informal labor...

Informality is a salient feature of labor market in Egypt as it is the case with many developing countries. This is the first study of the determinants of worker transitions between various labor market states using panel data from Egypt. We first provide a diagnosis of dynamic worker flows...

This article incorporates tax evasion into an optimum taxation framework with individuals differing in earning abilities and initial wealth. We find that despite the possibility of its evasion a tax on initial wealth should supplement the optimal nonlinear income tax, given a positive...

In a simple cash-credit model, I study the effects of the combination of costly tax collection and tax evasion on fiscal and monetary policy for optimal resource allocation. Allowing the informal sector to use cash more intensively than the formal sector, I compute the optimal interest and tax...

The desirability of inheritance and gift taxes depends on individuals' tax responsiveness. This paper demonstrates how strongly, and in what way, the German inheritance and gift tax influences taxpayer behavior. To that end, it combines administrative data with cross-bracket tax variation: a...

This paper analyses the impact of direct democracy, trust in government, the court and the legal system, and federalism on tax morale. In the tax compliance literature it is novel to analyse tax morale as dependent variable and to systematically analyse the effects of formal and informal...

Why citizens pay their taxes voluntarily is an important question for tax administrations worldwide. Some believe it is because taxpayers are deterred from tax evasion out of a fear of being caught or penalised. Others, in contrast, suggest that factors such as the level of tax morale one has...