Adding an informal sector to the IS-LM framework: A graphical exposition of the IS-LM-PC-SE model for the classroom and policymaker

Economic policies have been shown to affect the macroeconomy in a different fashion when a sizeable shadow economy is explicitly taken into account. But, in spite of its seemingly high relevance, no intermediate-Macroeconomics textbook posits a discussion on this topic. In this paper, we seek to mak...

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Detalles Bibliográficos
Autores: Costa Junior, Celso José, García-Cintado, Alejandro
Tipo de recurso: artículo
Fecha de publicación:2024
País:España
Institución:Universidad Pablo de Olavide (UPO)
Repositorio:RIO. Repositorio Institucional Olavide
Idioma:inglés
OAI Identifier:oai:rio.upo.es:10433/20922
Acceso en línea:https://hdl.handle.net/10433/20922
Access Level:acceso abierto
Palabra clave:Undergraduate macroeconomics
Nonspecialists
Fiscal policy
Fiscal adjustments
Shadow economy
Tax evasion
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spelling Adding an informal sector to the IS-LM framework: A graphical exposition of the IS-LM-PC-SE model for the classroom and policymakerCosta Junior, Celso JoséGarcía-Cintado, AlejandroUndergraduate macroeconomicsNonspecialistsFiscal policyFiscal adjustmentsShadow economyTax evasionEconomic policies have been shown to affect the macroeconomy in a different fashion when a sizeable shadow economy is explicitly taken into account. But, in spite of its seemingly high relevance, no intermediate-Macroeconomics textbook posits a discussion on this topic. In this paper, we seek to make a contribution by extending an otherwise conventional IS-MR-PC model along the same lines of the approach used in Blanchard’s highly acclaimed textbook (Blanchard, 2016a) to include an informal sector. We find that this two-sector model is capable of qualitatively reproducing the main basic results obtained in this literature. Therefore, importantly, this work provides a toolkit intended for undergraduate students, practitioners, policymakers, and, in general, nonspecialists on the cost-benefit analysis of economic policies in the presence of a significant underground economy.Elsevier20242024-06-0520242024-06-0120242024-06-01journal articlehttp://purl.org/coar/resource_type/c_6501VoRhttp://purl.org/coar/version/c_970fb48d4fbd8a85info:eu-repo/semantics/articleapplication/pdfhttps://hdl.handle.net/10433/20922reponame:RIO. Repositorio Institucional Olavideinstname:Universidad Pablo de Olavide (UPO)Inglésengopen accesshttp://purl.org/coar/access_right/c_abf2info:eu-repo/semantics/openAccessoai:rio.upo.es:10433/209222026-06-13T12:46:27Z
dc.title.none.fl_str_mv Adding an informal sector to the IS-LM framework: A graphical exposition of the IS-LM-PC-SE model for the classroom and policymaker
title Adding an informal sector to the IS-LM framework: A graphical exposition of the IS-LM-PC-SE model for the classroom and policymaker
spellingShingle Adding an informal sector to the IS-LM framework: A graphical exposition of the IS-LM-PC-SE model for the classroom and policymaker
Costa Junior, Celso José
Undergraduate macroeconomics
Nonspecialists
Fiscal policy
Fiscal adjustments
Shadow economy
Tax evasion
title_short Adding an informal sector to the IS-LM framework: A graphical exposition of the IS-LM-PC-SE model for the classroom and policymaker
title_full Adding an informal sector to the IS-LM framework: A graphical exposition of the IS-LM-PC-SE model for the classroom and policymaker
title_fullStr Adding an informal sector to the IS-LM framework: A graphical exposition of the IS-LM-PC-SE model for the classroom and policymaker
title_full_unstemmed Adding an informal sector to the IS-LM framework: A graphical exposition of the IS-LM-PC-SE model for the classroom and policymaker
title_sort Adding an informal sector to the IS-LM framework: A graphical exposition of the IS-LM-PC-SE model for the classroom and policymaker
dc.creator.none.fl_str_mv Costa Junior, Celso José
García-Cintado, Alejandro
author Costa Junior, Celso José
author_facet Costa Junior, Celso José
García-Cintado, Alejandro
author_role author
author2 García-Cintado, Alejandro
author2_role author
dc.contributor.none.fl_str_mv
dc.subject.none.fl_str_mv Undergraduate macroeconomics
Nonspecialists
Fiscal policy
Fiscal adjustments
Shadow economy
Tax evasion
topic Undergraduate macroeconomics
Nonspecialists
Fiscal policy
Fiscal adjustments
Shadow economy
Tax evasion
description Economic policies have been shown to affect the macroeconomy in a different fashion when a sizeable shadow economy is explicitly taken into account. But, in spite of its seemingly high relevance, no intermediate-Macroeconomics textbook posits a discussion on this topic. In this paper, we seek to make a contribution by extending an otherwise conventional IS-MR-PC model along the same lines of the approach used in Blanchard’s highly acclaimed textbook (Blanchard, 2016a) to include an informal sector. We find that this two-sector model is capable of qualitatively reproducing the main basic results obtained in this literature. Therefore, importantly, this work provides a toolkit intended for undergraduate students, practitioners, policymakers, and, in general, nonspecialists on the cost-benefit analysis of economic policies in the presence of a significant underground economy.
publishDate 2024
dc.date.none.fl_str_mv 2024
2024-06-05
2024
2024-06-01
2024
2024-06-01
dc.type.none.fl_str_mv journal article
http://purl.org/coar/resource_type/c_6501
VoR
http://purl.org/coar/version/c_970fb48d4fbd8a85
dc.type.openaire.fl_str_mv info:eu-repo/semantics/article
format article
dc.identifier.none.fl_str_mv https://hdl.handle.net/10433/20922
url https://hdl.handle.net/10433/20922
dc.language.none.fl_str_mv Inglés
eng
language_invalid_str_mv Inglés
language eng
dc.rights.none.fl_str_mv open access
http://purl.org/coar/access_right/c_abf2
dc.rights.openaire.fl_str_mv info:eu-repo/semantics/openAccess
rights_invalid_str_mv open access
http://purl.org/coar/access_right/c_abf2
eu_rights_str_mv openAccess
dc.format.none.fl_str_mv application/pdf
dc.publisher.none.fl_str_mv Elsevier
publisher.none.fl_str_mv Elsevier
dc.source.none.fl_str_mv reponame:RIO. Repositorio Institucional Olavide
instname:Universidad Pablo de Olavide (UPO)
instname_str Universidad Pablo de Olavide (UPO)
reponame_str RIO. Repositorio Institucional Olavide
collection RIO. Repositorio Institucional Olavide
repository.name.fl_str_mv
repository.mail.fl_str_mv
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