In this paper a two sector dynamic general equilibrium model is developed in order to evaluate the implications of the underground economy from a business cycle perspective. There are three main results. First, introducing an underground sector improves the fit of the model to the data,...

This article studies equilibrium effects of fiscal policy within a dynamic general equilibrium model where tax evasion and underground activities are explicitly incorporated. In particular, we show that a dynamic general equilibrium with tax evasion may give a rational justification for a...

This paper studies equilibrium effects of fiscal policy within a dynamic general equilibrium model where tax evasion and underground activities are explicitly incorporated. In particular, the paper analytically measures (both from a theoretical and empirical viewpoint) of how much the...

Different factors are often assigned an important role in the emergence of modern growth, such as the relationship between demographic factors and changes in institutions that promote innovation, the production of new ideas, the development of education or improvements in technology. In this...

Informal firms play a crucial role in both developing and developed countries, and there is evidence of a larger presence of moonlighting firms over ghost firms. The former are firms that operate simultaneously in the official and unofficial sectors, whereas the ghost firms undertake their...

Underlying this work is the idea that there is a problem of strategic complementarity of individuals who choose to evade. Complementarity results from the discretionary policies of governments and the strategic implications of the Studi di Settore (Sector Studies), the mechanism used in Italy to...

In this paper we investigate empirically the nature of the relation between underground employment and unions in Italy, focusing on certain productive sectors. The motivation for this analysis is the hypothesis of the existence of two different opposite channels through which unions affect...

In this article we investigate the relation between population and real wages in the Italian economy during the period 1320-1870. The main result is that the positive check is strong and statistically significant but the other equilibrating mechanism in the Malthusian model - the preventive...

This article presents a two-sector dynamic general equilibrium model in which income smoothing takes place within the households (intra-temporally), and consumption smoothing takes place among the households (inter-temporally). Idiosyncratic risk-sharing within the family is based on an income...

In this paper we investigate the effects of different fiscal policies on the firm choice to produce underground. We consider a tax evading firm operating simultaneously both in the regular and in the underground economy. We suggest that such a kind of firm, referred to as moonlighting firm, is...