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The Unobserved Economy And The Uk Laffer Curve


  • Edgar L. Feige

    (University of Wisconsin-Madison)

  • Robert T. McGee

    (University of Wisconsin-Madison)


Recent research on the unobserved economy suggests that the phenomenon has important implications for both macroeconomic policy and public finance. Attention is focused on the public finance implications by examining a macro-model model from which it is possible to derive a family of Laffer curves. The model reveals that the final shape and position of the Laffer curve depends upon the strength of supply side effects, the progressivity of the tax system and the size of the unobserved economy. Using alternative parameterizations of each of these effects, we obtain rough empirical estimates of the Laffer curve for the UK. Reference: Journal of Economic Affairs, Vol. 3, No.1, October, 1982, pp.36-42.

Suggested Citation

  • Edgar L. Feige & Robert T. McGee, 2005. "The Unobserved Economy And The Uk Laffer Curve," Macroeconomics 0502013, EconWPA.
  • Handle: RePEc:wpa:wuwpma:0502013 Note: Type of Document - pdf; pages: 6

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    References listed on IDEAS

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

    Cited by:

    1. Friedrich Schneider, 2006. "Shadow Economies and Corruption all over the World: What do we really Know?," CESifo Working Paper Series 1806, CESifo Group Munich.
    2. Schneider, Friedrich, 2004. "The Size of the Shadow Economies of 145 Countries all over the World: First Results over the Period 1999 to 2003," IZA Discussion Papers 1431, Institute for the Study of Labor (IZA).

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    JEL classification:

    • E1 - Macroeconomics and Monetary Economics - - General Aggregative Models
    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
    • 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

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