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We here examine the frequent claim that an increase in the tax base and a decrease in tax evasion will compensate for a loss in tax revenues caused by a lower tax level. Using a unique data set for the estimated underground economy in Italy from 1982 to 2006, we found that a loss in tax revenues...
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particular tax– policy on economic activity and tax revenue. We add an informal sector to the Bank of Greece DSGE model and use … the actual package of fiscal consolidation implemented in Greece over the period 2010–2015 to evaluate the role of the … underground economy seems to have been a key factor in Greece’s failure to achieve orderly debt consolidation while avoiding …
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Some authors argue that informality is associated with distorted firm decisions and inefficiency. In this paper, I assess the quantitative effect of incomplete tax enforcement on aggregate output and productivity using a dynamic general equilibrium framework. I calibrate the model using data for...
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