SWEDEN'S LAFFER CURVE: TAXATION AND THE UNOBSERVED ECONOMY

Edgar L .Feige () and Robert T. McGee
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Robert T. McGee: Florida State University

Macroeconomics from EconWPA

Abstract: 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 developing a simple macro model from which it is possible to derive a Laffer curve. The model reveals that the shape and position of the Laffer curve depend 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, it is possible to obtain rough empirical estimates of the Laffer curve for Sweden.

Keywords: Laffer curve; supply side; unobserved economy; underground economy; tax evasion; tax revenues (search for similar items in EconPapers)
JEL-codes: E31 E6 H26 H2 O17 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-mac
Date: Written 2005-01-19
Note: Type of Document - pdf; pages: 21

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http://129.3.20.41/eps/mac/papers/0501/0501023.pdf (application/pdf)

Related works:
Journal Article: Sweden's Laffer Curve: Taxation and the Unobserved Economy (1983)
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