Rise in the underground economy creates problems for the policy-makers to formulate economic policies, especially the monetary and fiscal policies. It is found that if there was no tax evasion, budgets balance might have been zero and positive for some years and we would not have needed to...

Using some special models, this study tries to quantify the size of underground economy in Romania. The exposition plan includes: 1) Models based on direct approaches; 2) Models based on indirect approaches; 3) A generalised model for the allocation of time; 4) A model based on May’s logistic;...

In this paper, we analyze implications of corruption on growth. We extend existing growth models by incorporating ubiquitous corruption as a by-product of the public sector. Corruption affects both taxation and public good provision, and therefore causes income redistribution and inefficiencies...

Public finance is strongly affected by tax evasion, which implies that public sector resources are very limited. Most of the analysis on how to fight tax evasion focused on the ways to deter evasion through incentives to people not to evade. This model has a different approach: instead of...

Tax evasion is typically analyzed in a principal/agent framework,the government (principal) trying to provide agents with the incentives to pay their taxes. However, evading sales, excise or trade taxes requires the cooperation of at least two taxpayers. When individuals evade taxes, they face...

This paper is concerned with the extent to which “presumptive taxation” can be an effective tool to cope with what are commonly called the “hard-to-tax”. While the HTT category is seldom very clearly defined -- often, for example, it excludes those at the top of the power pyramid who...

. This paper analyzes the relationship between tax rate levels and tax evasion in a context where the utility of a taxpayer depends on both his own consumption and his relative position with respect to the average declared income of the economy. In this framework, if the taxpayer declares an...

While examining the macroeconomic effects of increased government control of the informal sector, this paper develops a two-sector general equilibrium model featuring matching frictions, and heterogeneous workers in terms of moral. This facilitates an analysis of how wage setting and...

While examining the macroeconomic effects of government tax and punishment policies, this paper develops a three-sector general equilibrium model featuring matching frictions and worker-firm wage bargaining. Workers are assumed to differ in ability, and the choice of education is determined...

While examining the macroeconomic effects of increased government control of the informal sector, this paper develops a two-sector general equilibrium model featuring matching frictions and worker-firm wage bargaining. Different goods are produced in the formal sector and the informal sector,...