Orsi, Renzo; Raggi, Davide; Turino, Francesco - In: Review of Economic Dynamics 17 (2014) 3, pp. 417-436
We study the underground economy within a dynamic and stochastic general equilibrium framework. Our model combines limited tax enforcement with an otherwise standard two-sector neoclassical stochastic growth model. The Bayesian estimation of the model based on Italian data provides evidence in...