Optimal taxation and monitoring in an economy with matching frictions and underground activities

Gaetano Lisi

MPRA Paper from University Library of Munich, Germany

Abstract: This short paper shows the interdependence of taxation and monitoring policy in a search and matching model of equilibrium unemployment with an underground sector. More precisely, from a social welfare standpoint, two options are available to the policy maker: s/he may either substitute a tighter monitoring with a higher penalty or enforce both a higher taxation and an increased monitoring.

Keywords: optimal taxation; tax evasion; underground economy; job search theory (search for similar items in EconPapers)
JEL-codes: E26 H21 H26 J64 (search for similar items in EconPapers)
Date: 2010-11-27
New Economics Papers: this item is included in nep-dge, nep-mic and nep-pub
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Related works:
Journal Article: Optimal taxation and monitoring in an economy with matching frictions and underground activities (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:27701

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