Tax Evasion, Public Debt and Aggregate Instability
Réda Marakbi  1@  , Patrick Villieu  2@  
1 : Laboratoire d'économie d'Orleans  (LEO)  -  Site web
Université d'Orléans, CNRS : UMR7322
bat. A Rue de Blois - BP 6739 45067 ORLEANS CEDEX 2 -  France
2 : Laboratoire d'économie d'Orleans  (LEO)  -  Site web
Université d'Orléans, CNRS : UMR7322
bat. A Rue de Blois - BP 6739 45067 ORLEANS CEDEX 2 -  France

In this article, we develop an endogenous growth model to analyze the relation be- tween tax evasion and public debt accumulation. Our results are twofold. First, we find multiple equilibria where we find a positive (resp. negative) relation between tax evasion and public debt accumulation (resp. growth) in the neighborhood of the high BGP and a U-shaped (resp. inverted U-shaped) relation between tax evasion and public debt accumulation (resp. growth) in the neighborhood of the low BGP. Second, we show that the high BGP is saddle-path stable and the stability of the low BGP depends on the parameters of model : it can either be saddle-path stable (well determined), unstable (over determined) and in some cases, a Hopf bifurcation can appear. 


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