Dr. Joaquin Lopez recently accepted for publication in the Journal of Macroeconomics
For release: October 3, 2017
Dr. Joaquin (Jose) Lopez, assistant professor in the Department of Economics, recently had an article published in the Journal of Macroeconomics. His paper is entitled "A Quantitative Theory of Tax Evasion."
In his paper, Dr. Lopez develops a simple, unified approach to study informality (unregistered firms that do not pay taxes), as well as tax evasion by formal firms (firms registered with the tax authorities), both of which are pervasive in developing countries. He finds that reducing tax evasion by formal firms could have the unintended consequence of increasing the size of the informal sector by pushing some previously formal firms into informal status. Furthermore, he finds that as the economy develops, more firms find it optimal to become formal, shrinking the informal sector, but expanding the tax-evasion practices of the formal sector. Thus, if lower informality is a byproduct of development, and not vice versa, fiscal authorities can effectively achieve a solid tax base by focusing on tax evasion by formal firms.
"Dr. Lopez is a gifted young assistant professor and we are very proud of his recent recognition," said Dr. Bill Smith, chair of the Department of Economics. "Congratulations, Jose!"