Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/145050 
Year of Publication: 
2016
Series/Report no.: 
CESifo Working Paper No. 6015
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
This paper contributes to the GDP-consumption comovement puzzle literature investigating the role of tax evasion in explaining the consumption path after a Marginal Efficiency of Investment shock. We use an otherwise standard medium-scale New Keynesian DSGE model combining tax evasion with financial frictions à la Bernanke, Gertler, Gilchrist (1999). The main result of our paper shows that tax evasion can considerably shrink the GDP-consumption comovement puzzle area.
Subjects: 
tax evasion
investment shocks
DSGE modelling
financial frictions
GDP-consumption comovement puzzle
JEL: 
E22
E32
E44
E51
E62
G10
G21
G30
H20
Document Type: 
Working Paper
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