Authors: Gerasimos T. Soldatos
This is a note on corruption and underground economy in a Kaldor-type model of the business cycle. It appears that when the economy is booming and underground activities seek to enter the official economy, bureaucrats have the upper hand but until underground businesses cannot tolerate bureaucrats anymore and start reentering the informal sector. This is what checks the growth of the official output and gets it into its downward phase. Once in this phase, bureaucrats lose control and just follow passively the developments in the economy. At the trough of the contraction, official activities reach their nadir whereas the unofficial ones are at their zenith and seek to buy whatever has been left from the staggering official businesses. This is what leads to recovery in the absence of stabilization policies.
Comments: 8 Pages.
[v1] 2015-03-01 02:49:50
Unique-IP document downloads: 49 times
Vixra.org is a pre-print repository rather than a journal. Articles hosted may not yet have been verified by peer-review and should be treated as preliminary. In particular, anything that appears to include financial or legal advice or proposed medical treatments should be treated with due caution. Vixra.org will not be responsible for any consequences of actions that result from any form of use of any documents on this website.
Add your own feedback and questions here:
You are equally welcome to be positive or negative about any paper but please be polite. If you are being critical you must mention at least one specific error, otherwise your comment will be deleted as unhelpful.