The main goal of this paper is to examine the implications of firm-oriented fiscal policies, such as capital subsidies and tax allowances, in an economy with an underground sector. In addition, we investigate whether the technology structure of quot;hiddenquot; production may facilitate or...

This paper studies equilibrium effects of fiscal policy disturbances within a dynamic general equilibrium model where tax evasion and underground activities are explicitly incorporated. There are three main results. (i) The underground sector mitigates the distortionary impact of fiscal...

We use official time series of the Italian evaded VAT base (Ministry of Finance) for the period 1980:1–2006:4 to investigate empirically the long-run characteristics of tax evasion and the relationship with the tax burden. Three hitherto unexplored issues are addressed. First, using different...

This paper studies equilibrium effect of fiscal policy disturbances within a dynamic general equilibrium model where tax evasion and underground activities are explicitly incorporated. There are three main results. (i) The underground sector mitigates the distortionary impact of fiscal policies,...

This paper shows under indeterminacy and tax evasion, an increase in corporate, labor or income tax rates pushes the economy into an expansionary pattern. These effects are reversed when the steady state is saddle-path stable.

Using the theoretical framework based on the monopoly union model described in Kidd and Oswald (1987) and Jones (1987), this paper provides an explicit framework to assess the role of wage moderation in Italy in the last twenty years. There are two crucial ingredients to the model: the...

In this paper we investigate the relation between population, wages and urban population in the Italian economy. During the period examined, 1320-1870, the prevailing conditions were those of a poor, mainly agricultural economy with limited human capital and rudimentary technology. However,...

We propose a joint dating of the Italian business and credit cycle on a historical horizon, by applying a local turning-point dating algorithm to the level of the variables. Along with short cycles, corresponding to traditional business cycle fluctuations, we also investigate medium cycles,...