Fiscal consolidation plans with underground economy
研究了在存在地下经济的意大利，财政整顿计划（如削减公共支出和降低税率）如何影响税收逃逸，发现地下经济对政策反应强烈，资源会向正规部门转移。
Abstract Fiscal consolidation literature often neglects that there are economies characterized by sizable underground sectors, with their mechanisms of response to fiscal policy shocks. Therefore, reliable analyses of fiscal consolidation plans call for the decomposition of Gross Domestic Product in its regular and hidden components. We investigate fiscal consolidation effects in the context of tax evasion for the Italian economy. Results show that a temporary cut in public spending associated with a permanent drop in tax rate yet entails tax evasion reduction. The main underlying mechanism is the strong responsiveness of the underground sector, implying a reallocation of resources toward the regular sector.