Hidden Bibliographic Details
| Other authors / contributors: | International Monetary Fund.
|
|---|
| ISBN: | 145189192X
9781451891928
1281604917
9781281604910
9781451844061
1451844069
1462359159
9781462359158
1452722048
9781452722047
9786613785602
6613785601
|
|---|
| Notes: | Includes bibliographical references (pages 25-26).
Restrictions unspecified
Electronic reproduction. [Place of publication not identified] : HathiTrust Digital Library, 2010.
Master and use copy. Digital master created according to Benchmark for Faithful Digital Reproductions of Monographs and Serials, Version 1. Digital Library Federation, December 2002. http://purl.oclc.org/DLF/benchrepro0212
English.
digitized 2010 HathiTrust Digital Library committed to preserve
Print version record.
|
|---|
| Summary: | This paper develops a dynamic computable general equilibrium model in which optimizing agents evade taxes by operating in the underground economy. The cost to firms of evading taxes is that they find themselves subject to credit rationing from banks. Our model simulations show that in the absence of budgetary flexibility to adjust expenditures, raising tax rates too high drives firms into the underground economy, thereby reducing the tax base. Aggregate investment in the economy is lowered because of credit rationing. Taxes that are too low eliminate the underground economy, but result in unsustainable budget and trade deficits. Thus, the optimal rate of taxation, from a macroeconomic point of view, may lead to some underground activity.
|
|---|
| Other form: | Print version: Dabla-Norris, Era. Analysis of the underground economy and its macroeconomic consequences. [Washington, D.C.] : International Monetary Fund, ©2003
|
|---|
| Standard no.: | 10.5089/9781451891928.001
|
|---|
