Drawing on the existing theory, in this paper we analytically evaluate the limitvalues of certain important parameters involved in models used to estimate the size of the informal economy and to explain its workings. We develop a model which combines the level of income and the tax rate as the...

Economists have already established a relationship between tax rates and size of the hidden economy. The higher the level of taxation is, the greater the incentive to participate in hidden activity and escape taxes is. On the one hand, coming from generally accepted findings of the theory, we...

Using a small-size RMSM model, the authors simulate development alternatives in the medium run, revealing their implications upon the Romanian economy. The reference scenario is characterized by a moderate economic growth, based on the increase in the investements. Both imports exports are...