Journal articles
Tax evasion, tax corruption and stochastic growth
Abstract : This paper presents a continuous time stochastic growth model to study the effects of tax evasion and tax corruption on the level and volatility of private investment and public spending that are both factors of growth. The model highlights several channels through which the mean and volatility of these variables are affected. We first stress the role of equity markets, showing that the evasion outcome for the private sector is not necessarily viewed as a burden. Equity market performs here have the same role as a policy of tax exemption. In societies in which the share of private investment in percentage of GDP is growing, in which tax cheaters usually choose to shelter the proceeds of their illegal activities from the official financial institutions, and in which the productivity of public spending is often low, tax evasion and tax corruption may contribute to the development of private capital if people find an opportunity to invest the proceeds of their illegal activities in equity markets.
https://hal-amu.archives-ouvertes.fr/hal-01447874
Contributor : Patrice Cacciuttolo Connect in order to contact the contributor
Submitted on : Friday, January 27, 2017 - 12:15:31 PM
Last modification on : Thursday, November 4, 2021 - 11:58:07 AM
Contributor : Patrice Cacciuttolo Connect in order to contact the contributor
Submitted on : Friday, January 27, 2017 - 12:15:31 PM
Last modification on : Thursday, November 4, 2021 - 11:58:07 AM
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