This paper derives the optimal financial contract when a borrowing entrepreneur can evade taxes in a model of costly state verification. In contrast to previous literature on costly state verification and financial contracting, we find that standard debt contracts are not optimal when tax...

This paper derives the optimal financial contract when a borrowing entrepreneur can evade taxes in a model of costly state verification. In contrast to previous literature on costly state verification and financial contracting, we find that standard debt contracts are not optimal when tax...

This thesis aims to deepen the theoretical understanding of tax evasion. It focuses particularly, but not exclusively, on corporate tax evasion. Using microeconomic theory, especially contract-theoretic methods, chapters 2 and 3 analyze two features distinguishing corporate from individual tax...

Forward rates contain reliable information about cross-sectional differences in expected corporate bond returns. Many alternative bond-level and issuer-level variables, by contrast, are not reliably linked to expected bond returns or provide information about expected bond returns only through...

This paper derives a government's optimal tax audit policy when taxpayers hold different beliefs about the likelihood of a tax audit. When audits are inexpensive, differences in perceived audit risk lead to stricter optimal auditing in equilibrium. If audits are relatively costly, heterogeneity...

We examine how company-level greenhouse gas emissions have been related to company financials as well as the expected returns of the companies’ stocks and bonds from 2009 to 2018. Examining the US, developed ex US, and emerging markets, we do not find emission intensity, emission level, or...

This paper derives the optimal financial contract when an entrepreneur can evade taxes in a model of costly state verification. In contrast to previous literature on costly state verification and financial contracting, we find that standard debt contracts are not optimal when tax evasion is...

This paper analyzes corporate tax evasion in a principal-agent model with multitasking. A firm-owner hires a specialist tax manager who chooses the quantity as well as the quality of tax evasion. Higher quality is a form of self-insurance and lowers the firm's expected fine for tax evasion. In...

This paper derives a government's optimal tax audit policy when taxpayers hold different beliefs about the likelihood of a tax audit. When audits are inexpensive, differences in perceived audit risk lead to stricter optimal auditing in equilibrium. If audits are relatively costly, heterogeneity...

This paper derives the optimal financial contract when an entrepreneur can evade taxes in a model of costly state verification. In contrast to the previous literature, we find that standard debt contracts are not optimal when tax evasion is possible. Instead, the optimal contract is debt-like...