%0 Journal Article
%T In the Shadow of Public Debt: Are there Relations between Public Debt and the Shadow Economy?
%A Aloys Prinz
%A Hanno Beck
%A Hanno Beck
%J Economic Analysis and Policy
%D 2012
%I 
%X The question of this paper is whether there is a relation between the size of the shadow economy, the inflation tax and the debt-to-GDP ratio. This relationship is relevant for an understanding of sovereign debt crisis in a currency union due to the loss of a national inflation tax and due to tax evasion as a consequence of sizeable shadow economies. In this paper, empirical evidence is presented for the effect of the size of the shadow economy on the debt-to-GDP ratio as well as for the debt-increasing effect of the start of the European Monetary Union in 1999.
%K public debt
%K shadow economy
%K inflation tax
%K EMU
%U http://www.eap-journal.com/archive/v42_i2_07_Prinz_and_Beck.pdf