IDEAS home Printed from https://ideas.repec.org/a/asi/aeafrj/v6y2016i2p90-99id1450.html
   My bibliography  Save this article

An Anti-Austerity Policy Recipe Against Debt Accumulation in the Presence of Hidden Economy

Author

Listed:
  • Gerasimos T Soldatos

Abstract

Contrary to what the literature on the linkage between debt accumulation and hidden economy suggests, this paper advocates that the two relationships, tax-hidden economy size and inflation-hidden economy size, have to be inverse because it is the relative, not the absolute hidden economy size that matters, and it is this that should be the yardstick for empirical work on the subject. It is also this that should be the yardstick for policymaking against debt accumulation by following the anti-austerity policy recipe that debt manipulation should be relying more on money than on taxation, that as soon as more money facilitates hidden activities, tax design should be counteracting this trend too, and that the Laffer curve should be peaking at an average tax rate which is less than one. This rule derives as a matter of preserving such official-cum-hidden economy technical-cum-allocative efficiency over the course of the business cycle that keeps the overall economy always in general equilibrium.

Suggested Citation

  • Gerasimos T Soldatos, 2016. "An Anti-Austerity Policy Recipe Against Debt Accumulation in the Presence of Hidden Economy," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 6(2), pages 90-99.
    • Handle: RePEc:asi:aeafrj:v:6:y:2016:i:2:p:90-99:id:1450
    as

    Download full text from publisher

    File URL: https://archive.aessweb.com/index.php/5002/article/view/1450/2096
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Gerasimos T. Soldatos, 2018. "Multiplier–Accelerator Interaction in the Presence of an Underground Economy and Taxation," Margin: The Journal of Applied Economic Research, National Council of Applied Economic Research, vol. 12(2), pages 244-256, May.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:asi:aeafrj:v:6:y:2016:i:2:p:90-99:id:1450. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Robert Allen (email available below). General contact details of provider: https://archive.aessweb.com/index.php/5002/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.