Tax evasion and financial repression

Rangan Gupta ()

Journal of Economics and Business, 2008, vol. 60, issue 6, pages 517-535

Abstract: Using a simple overlapping generations framework, calibrated to four Southern European countries, we analyze the relationship between tax evasion, determined endogenously, and financial repression. We show that higher degree of tax evasion within a country, resulting from a higher level of corruption and a lower penalty rate, yields higher degrees of financial repression as a social optimum. However, a higher degree of tax evasion, due to a lower tax rate, reduces the severity of the financial restriction.

Keywords: Underground; economy; Tax; evasion; Macroeconomic; policy (search for similar items in EconPapers)
Date: 2008
View citations in EconPapers

Downloads: (external link)
http://www.sciencedirect.com/science/article/B6V7T ... 835a3ee4a5d2462e0dff
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Tax Evasion and Financial Repression (2007)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:eee:jebusi:v:60:y:2008:i:6:p:517-535

Access Statistics for this article

Journal of Economics and Business is edited by G. P. Szegö

More articles in Journal of Economics and Business from Elsevier
Series data maintained by Heidi Boesdal ().