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| Emin Gahramanov |
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| ''Tax Evasion and Dynamic Inefficiency'' |
| ( 2009, Vol. 29 No.1 ) |
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| I show within a two-period overlapping generations model with income tax evasion that when the penalty rate set by the government is su¢ ciently
small, it is theoretically possible for the capital stock to exceed the golden-rule level on the balanced-growth path. However, such a dynamic inefficiency cannot be guaranteed when the probability of evasion detection is nil.
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| Keywords: |
JEL: D9 - Intertemporal Choice and Growth: General
H2 - Taxation, Subsidies, and Revenue: General |
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| Manuscript Received : Nov 16 2008 | | Manuscript Accepted : Mar 25 2009 |
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