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Fiscal Policy under Indeterminacy and Tax Evasion

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Author Info
Francesco Busato
Bruno Chiarini
Enrico Marchetti () (Department of Economics, University of Aarhus, Denmark)

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Abstract

This paper shows under indeterminacy and tax evasion, an increase in corporate, labor or income tax rates pushes the economy into an expansionary pattern. These effects are reversed when the steady state is saddle-path stable.

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Publisher Info
Paper provided by School of Economics and Management, University of Aarhus in its series Economics Working Papers with number 2005-9.

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Length: 22
Date of creation: 30 May 2005
Date of revision:
Handle: RePEc:aah:aarhec:2005-9

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Web page: http://www.econ.au.dk/afn/

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Related research
Keywords: Dynamic General Equilibrium Models; Fiscal Policy; Tax Evasion;

Find related papers by JEL classification:
E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
E13 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Neoclassical
E26 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Informal Economy; Underground Economy
O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

Cited by:
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  1. Herbertsson, Tryggvi Thor & Martin Paldam, 2005. "Does development aid help poor countries catch up?," Economics Working Papers 2005-16, School of Economics and Management, University of Aarhus. [Downloadable!]
  2. Hristos Doucouliagos & Martin Paldam, 2005. "The Aid Effectiveness Literature. The Sad Result of 40 Years of Research," Economics Working Papers 2005-15, School of Economics and Management, University of Aarhus. [Downloadable!]
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This page was last updated on 2009-11-6.

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