Hidden Economies and the Socially Optimal Fiscal-Tax to Liquidity-Tax Ratio
AbstractDifferential tax analysis is used to show how the socially optimal fiscal-tax to liquidity-tax ratio changes with the relative size of the tax-evading hidden economy. The smaller the relative size of the hidden economy, the larger the optimal fiscal-tax to liquidity-tax ratio. The empirical cross-section and panel evidence supports this theoretical result. --
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Bibliographic InfoPaper provided by Kiel Institute for the World Economy in its series Economics Discussion Papers with number 2007-10.
Date of creation: 2007
Date of revision:
inflation tax; hidden/shadow/underground economy; seigniorage;
Other versions of this item:
- Ercolani, Marco G., 2007. "Hidden Economies and the Socially Optimal Fiscal-Tax to Liquidity-Tax Ratio," Economics - The Open-Access, Open-Assessment E-Journal, Kiel Institute for the World Economy, vol. 1(6), pages 1-32.
- H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
- E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
- O17 - Economic Development, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
- E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-05-19 (All new papers)
- NEP-MAC-2007-05-19 (Macroeconomics)
- NEP-PBE-2007-05-19 (Public Economics)
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.:
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William Davidson Institute Working Papers Series
436, William Davidson Institute at the University of Michigan.
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- Aloys Prinz & Hanno Beck, 2012. "In the Shadow of Public Debt: Are there Relations between Public Debt and the Shadow Economy?," Economic Analysis and Policy (EAP), Queensland University of Technology (QUT), School of Economics and Finance, vol. 42(2), pages 221-236, September.
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