Efficient black markets?
نویسندگان
چکیده
This paper investigates analytically the welfare effects of black-market activities that firms undertake to evade taxes. The desirability of a black market is linked to the attributes of the goods supplied by blackmarket firms. The analysis identifies cases where a black market reduces (increases) the distortionary impact of taxation on the allocation of resources across the goods that the government is attempting to tax, leading to a welfare gain (loss). © 2007 Published by Elsevier B.V. JEL classification: H21; H26
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