Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/17933 
Year of Publication: 
2007
Series/Report no.: 
Economics Discussion Papers No. 2007-10
Publisher: 
Kiel Institute for the World Economy (IfW), Kiel
Abstract: 
Differential tax analysis is used to show how the socially optimal fiscal-tax to liquidity-tax ratio changes with the relative size of the tax-evading hidden economy. The smaller the relative size of the hidden economy, the larger the optimal fiscal-tax to liquidity-tax ratio. The empirical cross-section and panel evidence supports this theoretical result.
Subjects: 
inflation tax
hidden/shadow/underground economy
seigniorage
JEL: 
H21
E52
O17
E31
Creative Commons License: 
cc-by-nc Logo
Document Type: 
Working Paper

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