Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
5098478 | Journal of Economic Dynamics and Control | 2014 | 19 Pages |
Abstract
We construct a dynamic general equilibrium model of tax evasion where agents choose to report some of their income. Unreported income requires using a payment method that avoids recordkeeping in some markets-cash. Trade using cash to avoid taxes is the 'shadow economy' in our model. We then calibrate our model using money, interest rate and GDP data to back out the size of the shadow economy for a sample of countries and compare our measures to traditional reduced form estimates.
Keywords
Related Topics
Physical Sciences and Engineering
Mathematics
Control and Optimization
Authors
Pedro Gomis-Porqueras, Adrian Peralta-Alva, Christopher Waller,