How is the size of the informal sector affected when the distribution of social expenditures across formal and informal workers changes? Given this distribution, how is it affected when the generosity of these transfers changes? We use a search frictions model with informality, (ex post)...

This comment provides a reply to Prof. Feige’s paper with the title “Reflections on the Meaning and Measurement of Unobserved Economies: What do we really know about the ‘Shadow Economy’?”, in which Prof. Feige heavily criticizes me. I show that the same critique which Prof. Feige...

This paper presents various methods for estimating the size of the shadow economy and analyzes their strengths and weaknesses. The purpose of the paper is twofold. Firstly, it demonstrates that no ideal method exists to estimate the size and development of the shadow economy. Because of its...

In this paper, the authors empirically investigate the relationship between energy consumption and the size of the informal economy. Relying on panel data regression models, their results show that at the aggregate level, energy intensity is inversely related to the size of the informal sector,...

A matching model will explain both unemployment and economic growth by considering the underground sector and human capital. Three problems can thus be simultaneously accounted for: (i) the persistence of the underground sector, (ii) the ambiguous relationships between underground employment and...

This paper aims to provide a thorough theoretical formalisation of the ‘slippery slope’ framework in order to highlight the effects and the macroeconomic implications of the dynamics between power and trust. In particular, the proposed model is able to differentiate between coercive and...

This paper develops a model of sequential job search to understand the factors determining the effect of tax and enforcement policies on the size (i.e., employment share) of informal sector. The focus is on the role of informal sector as a stepping stone to formal jobs. I argue that the...

Free movement and freedom of establishment existing within the European Union institutions are the main factors which make European Union open for business activities. However, it should be noted that all EU countries have their own tax systems and fiscal policy. This, in turn, differentiates...

This paper investigates the role of consumer credit growth and expansion of consumer financial services on the reduction of informal employment in a developing country. I argue that financial services growth should lead to a decline in the share of informal employment given that consumers whose...

The drug cartels of South America and organized crime have long been known to use semi-sub speedboats, Narco-Torpedoes and Narco-Submarines for smuggling cocaine from South America to Mexico and eventually to the United States of America. The drug trade is increasing strongly and organized crime...