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Un modelo IS/LM con economía ilegal y lavado de dinero
[Modeling illegal economy and money laundering: an IS/LM framework]

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  • Slim, Sadri

Abstract

The purpose of this paper is to present an extended version of the IS/LM model, with illegal economy and money laundering in a closed economy, which allows an macroeconomic analysis of the effects of this presence on short-term equilibrium. Without disregarding the FATF´s money laundering typology, we propose to differentiate the money laundering activities by the degree of crime organization. Thus, in a closed economy, we suppose two money laundering channels, through consumption and investment, which are reflecting the reintegration of the illegal money by individual criminals and by the organized crime. It is shown that the multiplier effect of the illegal economic activities is always negative on formal GDP, while the effect on the interest rate depends on the structure of the considered economy.

Suggested Citation

  • Slim, Sadri, 2013. "Un modelo IS/LM con economía ilegal y lavado de dinero [Modeling illegal economy and money laundering: an IS/LM framework]," MPRA Paper 46304, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:46304
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    References listed on IDEAS

    as
    1. Gary S. Becker, 1974. "Crime and Punishment: An Economic Approach," NBER Chapters, in: Essays in the Economics of Crime and Punishment, pages 1-54, National Bureau of Economic Research, Inc.
    2. Philippe Barthelemy, 1988. "The Macroeconomic Estimates Of The Hidden Economy: A Critical Analysis," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 34(2), pages 183-208, June.
    3. Poret, Sylvaine, 2002. "Paradoxical effects of law enforcement policies: the case of the illicit drug market," International Review of Law and Economics, Elsevier, vol. 22(4), pages 465-493, December.
    4. David J. Pyle, 1989. "Tax Evasion and the Black Economy," Palgrave Macmillan Books, Palgrave Macmillan, number 978-1-349-08488-3.
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    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.

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    More about this item

    Keywords

    Money Laundering; ISLM Model; Multiplier effects; Informal Economy;
    All these keywords.

    JEL classification:

    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
    • E26 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Informal Economy; Underground Economy
    • E4 - Macroeconomics and Monetary Economics - - Money and Interest Rates
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

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