Money laundering in a two-sector model: using theory for measurement
AbstractThis paper implements a methodology that exploits firms and householdsâ optimality conditions to measure money laundering for the Italian economy. This approach, first implemented by Ingram, Kocherlakota, and Savin (1997) to the household production sector, and by Busato, Chiarini and Di Maro (2006) for measuring the underground economy, allows to generate high frequency series for the money laundering using a theoretical two-sector dynamic general equilibrium model calibrated over the sample 1981:01-2001:04. The analysis of the generated series suggests two main results. First, money laundering accounts for approximately 12 percent of aggregate GDP; second, money laundering is more volatile than aggregate GDP, and it is negatively correlated with it.
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Bibliographic InfoArticle provided by Springer in its journal European Journal of Law and Economics.
Volume (Year): 26 (2008)
Issue (Month): 3 (December)
Contact details of provider:
Web page: http://www.springerlink.com/link.asp?id=100264
Money laundering; Two-sector dynamic general equilibrium model; Illegal economy; E26; E32; K40;
Other versions of this item:
- Amedeo Argentiero & Michele Bagella & Francesco Busato, 2008. "Money laundering in a two sector model: using theory for measurement," CEIS Research Paper 128, Tor Vergata University, CEIS, revised 09 Sep 2008.
- E26 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Informal Economy; Underground Economy
- E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
- K40 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - General
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