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Bienestar y ciclos económicos en una economía con evasión y sector subterráneo
[Welfare and business cycles in an economy with evasion and underground sector]

Author

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  • Vargas, Jose P Mauricio

Abstract

Using a Dynamic Stochastic General Equilibrium Model (DSGE) in which the levels of evasion of the firms and the allocation of work and capital to an underground sector of the economy are endogenously determined, we exercise different policies in scenes with anticipated and not anticipated measures, with independent and dependant stochastic shocks. In all the cases the results are analyzed on the welfare costs of the agents and the economic cycles. The results of the model depend on important way of an indicator of governmental effectiveness in agreement with the empirical evidence. We found that the existence of the underground economy can reduce the volatility of the total of the economy and its effects on the welfare rest in the externalities degree that the productive sector receives from the government.

Suggested Citation

  • Vargas, Jose P Mauricio, 2009. "Bienestar y ciclos económicos en una economía con evasión y sector subterráneo
    [Welfare and business cycles in an economy with evasion and underground sector]
    ," MPRA Paper 18679, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:18679
    as

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    File URL: https://mpra.ub.uni-muenchen.de/18679/1/MPRA_paper_18679.pdf
    File Function: original version
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    References listed on IDEAS

    as
    1. Schmitt-Grohe, Stephanie & Uribe, Martin, 2007. "Optimal simple and implementable monetary and fiscal rules," Journal of Monetary Economics, Elsevier, vol. 54(6), pages 1702-1725, September.
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    5. Schmitt-Grohe, Stephanie & Uribe, Martin, 2004. "Solving dynamic general equilibrium models using a second-order approximation to the policy function," Journal of Economic Dynamics and Control, Elsevier, vol. 28(4), pages 755-775, January.
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    7. Friedrich Schneider, 2005. "Shadow Economies of 145 Countries all over the World: What Do We Really Know?," CREMA Working Paper Series 2005-13, Center for Research in Economics, Management and the Arts (CREMA).
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    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Underground Economy; Evasion; DSGE;

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • E26 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Informal Economy; Underground Economy

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