Optimal taxation and monitoring in an economy with matching frictions and underground activities
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: she/he may either substitute a tighter...
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| Format: | Article |
| Language: | English |
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Alexandru Ioan Cuza University of Iasi
2011-06-01
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| Series: | Eastern Journal of European Studies |
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| Online Access: | http://www.ejes.uaic.ro/articles/EJES2011_0201_LIS.pdf |
| Summary: | 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: she/he may either substitute a tighter monitoring with a higher penalty or enforce both a higher taxation and an increased monitoring. |
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| ISSN: | 2068-651X 2068-6633 |