Financial Frictions and Firm Informality: A General Equilibrium Perspective

Nopic
In this paper we build a model of occupational choice with informal production and progressive income taxation. We calibrate the model to the Brazilian economy to evaluate the impact of removing financial frictions on informality. We find that financial deepening leads to a drop in the size of the informal sector (from 37 percent to 22 percent... READ MORE...

Publication date: September 2020
ISBN 9781513557809
$18.00

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Publication date: September 2020

English