IDEAS home Printed from https://ideas.repec.org/a/eee/ecanpo/v42y2012i2p237-256.html

Macroeconomic Implications of the Underground Sector: Challenging the Double Business Cycle Approach

Author

Listed:
  • Catalina Granda-Carvajal

    (Universidad de Antioquia Calle 67 53-108 Medellín, Colombia)

Abstract

Within the literature on business cycles featuring underground activities, there is an approach based on the arguable premise that these are countercyclical. This paper develops a real business cycle model without such an assumption. Preferences are additively separable in formal and underground labor. Further, leisure time is spent on irregular work and non-market activities. Simulations permit examining how the model performs and comparing the results with related findings. Also, computational experiments allow analyzing the effects of taxes, enforcement and tastes for underground labor on aggregate fluctuations. These experiments offer a comprehensive view of the cyclical implications of the shadow economy.

Suggested Citation

  • Catalina Granda-Carvajal, 2012. "Macroeconomic Implications of the Underground Sector: Challenging the Double Business Cycle Approach," Economic Analysis and Policy, Elsevier, vol. 42(2), pages 237-256, September.
    • Handle: RePEc:eee:ecanpo:v:42:y:2012:i:2:p:237-256
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0313592612500238
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or

    for a different version of it.

    Other versions of this item:

    Citations

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


    Cited by:

    1. Slim, Sadri, 2015. "Un modelo Mundell-Fleming con economía ilegal y lavado de dinero [Modeling illegal economy and money laundering: a Mundell-Fleming framework]," MPRA Paper 64675, University Library of Munich, Germany.
    2. Alan Finkelstein Shapiro, 2015. "Institutions, Informal Labor Markets, and Business Cycle Volatility," Economía Journal, The Latin American and Caribbean Economic Association - LACEA, vol. 0(Fall 2015), pages 77-112.
    3. 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, February.
    4. Ceyhun Elgin & Ferda Erturk, 2019. "Informal economies around the world: measures, determinants and consequences," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 9(2), pages 221-237, June.
    5. Shapiro, Alan Finkelstein, 2015. "Institutions, informal labor markets, and business cycle volatility," LSE Research Online Documents on Economics 123408, London School of Economics and Political Science, LSE Library.
    6. Jesús J. Rodríguez De Luque, 2014. "Efectos de las políticas tributaria y fiscalizadora sobre el tamano del sector informal en Colombia," Revista Cuadernos de Economia, Universidad Nacional de Colombia, FCE, CID.
    7. Soldatos, Gerasimos T., 2015. "An Anti-Austerity Policy Recipe against Debt Accumulation in the Presence of Hidden Economy," MPRA Paper 69911, University Library of Munich, Germany.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    JEL classification:

    • 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
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

    Statistics

    Access and download statistics

    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:eee:ecanpo:v:42:y:2012:i:2:p:237-256. 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: Catherine Liu (email available below). General contact details of provider: http://www.journals.elsevier.com/economic-analysis-and-policy .

    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.