This paper analyzes whether taxation can be successfully used to reduce the incidence of labor informality and achieve higher equality in a globalized economy. To this purpose, it develops a two-area model: a developed country and an emerging country. The two areas differ according to the size...

This paper discusses the impact of a gradual, pre-announced significant increase of the minimum wage during 2013-16 in Romania. The main finding is that the positive effects prevail when the starting level of increase in the minimum wage is very low and the economy is in a negative output gap....