Public debt management and tax evasion
Argentiero, A and Cerqueti, R (2019). Public debt management and tax evasion. Macroeconomic Dynamics.
|Authors||Argentiero, A and Cerqueti, R|
This paper deals with the optimal management of the public debt-to-GDP ratio. We specifically focus on a contrasting tax evasion-based strategy for controlling the debt-to-GDP ratio. Two devices can be employed by the policymaker: by the one side, the tax rate is to be applied to the tax payers; by the other side, the monitoring activity is to be performed in order to detect the evaded taxes. To pursue our scopes, a stochastic control problem is developed and solved. Some numerical experiments validate the theoretical proposal and lead to an intuitive discussion of the obtained findings.
|Keywords||Public debt to GDP ratio; tax evasion; tax rate; evasion monitoring; stochastic control; dynamic programming|
|Publisher||Cambridge University Press (CUP)|
|Digital Object Identifier (DOI)||doi:10.1017/s1365100519000361|
|Online||17 Jun 2019|
|Publication process dates|
|Accepted||17 Jun 2019|
|Deposited||19 Feb 2020|
|Accepted author manuscript|
CC BY 4.0
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