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Settore sommerso e politiche di emersione: un approccio stocastico

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Author Info

  • Margherita Scarlato

    (University Federico II of Naples)

  • Marisa Cenci

    (University of Roma Tre)

Abstract

The aim of this paper is to analyse the role of uncertainty in shaping the decisions of firms in the underground economy. Following the option value approach, we present a dynamic model which captures (i) the irreversibility of riallocation decisions from the underground sector to the legal sector and (ii)the option value od delaying the riallocation decisions when stochastic shocks can change the net present returns in both the legal and the underground sectors. The model allow us to draw a number of interesting policy implications. Last we use the theoretical results to address the specific issues that arise in the case of the Mezzogiorno of Italy.

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File URL: http://128.118.178.162/eps/ge/papers/0402/0402003.pdf
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Bibliographic Info

Paper provided by EconWPA in its series GE, Growth, Math methods with number 0402003.

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Length: 30 pages
Date of creation: 11 Feb 2004
Date of revision:
Handle: RePEc:wpa:wuwpge:0402003

Note: Type of Document - pdf; to print on hp laserjet 1300; pages: 30 ; figures: 2 figures. 30 pages, pdf file
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Web page: http://128.118.178.162

Related research

Keywords: decision-making under uncertainty; stochastic programming; underground economy;

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