Macro seminar
Time : 12h15 – 13h30
Date : 11 Décembre 2023

Salle 3001

PAPPADA Francesco (Ca’ Foscari and PSE) “Rethinking the Informal Economy and the Hugo Effect”

Abstract: This paper offers a new approach to measuring the size of the informal economy based on VAT data for the European Union. Although data intensive, our EVADE measure is simpler and more transparent than existing measures. EVADE also shows more variation across countries of Europe than earlier measures, including significantly higher informality in Greece, Italy and Spain, for example. Moreover, we find considerably higher variation within countries across time; in a cross-country time series regression, controlling for tax rates, we con- firm that the informal economy grows significantly in recessions and decreases in booms, which we term the “Hugo effect”.

Joint work : Kenneth Rogoff (Harvard University)

Alessandro RIBONI (CREST)