THE UNOBSERVED ECONOMY AND THE UK LAFFER CURVE

Edgar L .Feige () and Robert T. McGee
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Robert T. McGee: University of Wisconsin-Madison

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 examining a macro-model model from which it is possible to derive a family of Laffer curves. The model reveals that the final shape and position of the Laffer curve depends 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, we obtain rough empirical estimates of the Laffer curve for the UK. Reference: Journal of Economic Affairs, Vol. 3, No.1, October, 1982, pp.36-42.

Keywords: UNOBSERVED ECONOMY; UNDERGROUND ECONOMY; LAFFER CURVE; SUPPLY SIDE (search for similar items in EconPapers)
JEL-codes: E1 E6 H26 O17 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dev and nep-mac
Date: Written 2005-02-04
Note: Type of Document - pdf; pages: 6

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