Tax evasion and growth
AbstractIn an overlapping generations model, in which savings and tax evasion are endogenous, tax evasion will have a negative effect on long-term growth if public services are productive inputs for private producers. It is shown in the paper that tax evasion reduces the endogenous growth rate. Moreover; the case of pure public consumption is considered. Growth is then exogenous at the steady state path. It is found out that the effect ofa tax-enforcement parameter change on the longrun equilibrium heavily depends on the intertemporal elasticity of substitution.
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Bibliographic InfoArticle provided by Finnish Economic Association in its journal Finnish Economic Papers.
Volume (Year): 8 (1995)
Issue (Month): 2 (Autumn)
Find related papers by JEL classification:
- H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion
- O41 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Gylfason, T., 1993.
"Optimal Saving, Interest Rates and Endogenous Growth,"
539, Stockholm - International Economic Studies.
- Gylfason, Thorvaldur, 1993. " Optimal Saving, Interest Rates, and Endogenous Growth," Scandinavian Journal of Economics, Wiley Blackwell, vol. 95(4), pages 517-33, December.
- Andersen, Per, 1977. " Tax Evasion and Labor Supply," Scandinavian Journal of Economics, Wiley Blackwell, vol. 79(3), pages 375-83.
- Eichhorn, Christoph, 2006. "Optimal Policies in the Presence of Tax Evasion," Munich Dissertations in Economics 5586, University of Munich, Department of Economics.
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