Discussion Paper
No. 2007-10 | March 12, 2007
Marco G Ercolani
Hidden Economies and the Socially Optimal Fiscal-Tax to Liquidity-Tax Ratio

Abstract

Differential tax analysis is used to show how the socially optimal fiscal-tax to liquidity-tax ratio changes with the relative size of the tax-evading hidden economy. The smaller the relative size of the hidden economy, the larger the optimal fiscal-tax to liquidity-tax ratio. The empirical cross-section and panel evidence supports this theoretical result.

JEL Classification:

E31, E52, H21, O17

Links

Cite As

[Please cite the corresponding journal article] Marco G Ercolani (2007). Hidden Economies and the Socially Optimal Fiscal-Tax to Liquidity-Tax Ratio. Economics Discussion Papers, No 2007-10, Kiel Institute for the World Economy. http://www.economics-ejournal.org/economics/discussionpapers/2007-10


Comments and Questions



Marco Ercolani - Title change?
March 20, 2007 - 15:41
A minor point really... In view of the previous discussion papers, should the title be changed to: "Shadow Economies and the Socially Optimal Fiscal-Tax to Seigniorage-Tax Ratio"?

anonymous - Referee Report
April 02, 2007 - 11:11
see attached file
[ Download attached file ]

anonymous - Referee Report
April 24, 2007 - 12:14
see attached file
[ Download attached file ]

Marco Ercolani - Response to Referee Reports
May 01, 2007 - 15:26
This document cointains responses to both referees' comments and suggestions.
[ Download attached file ]