Construction of a Keynesian macroeconomic model with informal economy: a simulation exercise

The purpose of this article is to construct a Keynesian model which integrates the informal economy, based on a short-term analysis. From a structural system of 23 equations, we propose a simple modeling that allows for an assessment of the impact of illegal activities on the major macroeconomic variables. Stemmed from a simulation exercise, the results indicate that multiplier effects due to a unit variation of informal income are significant on the main national aggregates. Particularly, for an economy which exhibits a high rate of imports penetration, multiplier effects lead to a reduction of legal income, legal savings of firms and government, legal investment as well as legal importations.economie informelle;modèle macroéconomique;effets multiplicateurs

Construction d’un modèle macroéconomique keynésien avec économie informelle: un exercice de simulation

The purpose of this article is to construct a Keynesian model which integrates the informal economy, based on a short-term analysis. From a structural system of 23 equations, we propose a simple modeling that allows for an assessment of the impact of illegal activities on the major macroeconomic variables. Stemmed from a simulation exercise, the results indicate that multiplier effects due to a unit variation of informal income are significant on the main national aggregates. Particularly, for an economy which exhibits a high rate of imports penetration, multiplier effects lead to a reduction of legal income, legal savings of firms and government, legal investment as well as legal importations

Un modelo IS/LM con economía ilegal y lavado de dinero

The purpose of this paper is to present an extended version of the IS/LM model, with illegal economy and money laundering in a closed economy, which allows an macroeconomic analysis of the effects of this presence on short-term equilibrium. Without disregarding the FATF´s money laundering typology, we propose to differentiate the money laundering activities by the degree of crime organization. Thus, in a closed economy, we suppose two money laundering channels, through consumption and investment, which are reflecting the reintegration of the illegal money by individual criminals and by the organized crime. It is shown that the multiplier effect of the illegal economic activities is always negative on formal GDP, while the effect on the interest rate depends on the structure of the considered economy

Un modelo Mundell-Fleming con economía ilegal y lavado de dinero

The purpose of this paper is to present an extended version of the Mundell-Fleming model which allows a macroeconomic analysis of the effects stemming from illegal economy with money laundering on the short-term equilibrium for a small open economy. Without disregarding the FATF´s money laundering typology, we propose to differentiate the money laundering activities by the degree of crime organization, i.e. differentiating between individual, national as well as transnational crimes. According to the previous taxonomy, we postulate four channels of money laundering that enable the reintegration of illegal money, through consumption, investment, international trade and capital movements. In this context, it is shown that the multiplier effect triggered by illegal economic activities is always negative on formal GDP. However, the effect on the interest rate is subtler and depends on the structure of the given economy, which could lead to an appreciation or depreciation of the exchange rate related to the degree of capital mobility

Un modelo Mundell-Fleming con economía ilegal y lavado de dinero

The purpose of this paper is to present an extended version of the Mundell-Fleming model which allows a macroeconomic analysis of the effects stemming from illegal economy with money laundering on the short-term equilibrium for a small open economy. Without disregarding the FATF´s money laundering typology, we propose to differentiate the money laundering activities by the degree of crime organization, i.e. differentiating between individual, national as well as transnational crimes. According to the previous taxonomy, we postulate four channels of money laundering that enable the reintegration of illegal money, through consumption, investment, international trade and capital movements. In this context, it is shown that the multiplier effect triggered by illegal economic activities is always negative on formal GDP. However, the effect on the interest rate is subtler and depends on the structure of the given economy, which could lead to an appreciation or depreciation of the exchange rate related to the degree of capital mobility

Los efectos macroeconómicos del lavado de dinero

The purpose of this research is to study the presence of illegal economy and money laundering processes from a macroeconomic perspective to analyze their economic effects and propose a conceptual framework that identifies its impact in terms of the mechanisms identified. Thus, considering the FATF typology, we analyze the real and monetary effects of each mechanism outlined, differentiating the effects on closed economy generated by elementary and washing circuits of organized crime, from the effects of money laundering in open economy relevant mechanisms of transnational crime

Du refus de vente au don: une explication de la formation du prix par l´affect

This paper aims at explaining observed distinct prices announced by a single supplier for an identical product, in an illegal framework. The modeling proposed here examines an augmented mark-up pricing equation for oligopolistic markets that includes a function of social discrimination. The latter is justified through both sociologic and anthropologic approaches which are taken into account the importance of the degree of personalization that characterizes any exchange, either merchant or non merchant. Such a perspective leads us to conceive prices as transmitting not only a vector of information but also a vector of affect that signals the level of social integration for participants interacting into personal exchanges. Without a legal benchmark, individuals are differentiated by their position in social networks, including family. Given the function of social discrimination, a more complete explanation can be displayed in terms of why a continuum of prices exists for a same illegal good for instance swindling prices, competitive market prices, non-market prices etc. Therefore, by converting each price in a singular expression of a particular exchange, we demonstrate that belonging or not to a social network impacts on price formation in illegal markets, even provides a better understanding of some extreme cases such as refusal of sale or gift exchange

Un modelo IS/LM con economía ilegal y lavado de dinero

The purpose of this paper is to present an extended version of the IS/LM model, with illegal economy and money laundering in a closed economy, which allows an macroeconomic analysis of the effects of this presence on short-term equilibrium. Without disregarding the FATF´s money laundering typology, we propose to differentiate the money laundering activities by the degree of crime organization. Thus, in a closed economy, we suppose two money laundering channels, through consumption and investment, which are reflecting the reintegration of the illegal money by individual criminals and by the organized crime. It is shown that the multiplier effect of the illegal economic activities is always negative on formal GDP, while the effect on the interest rate depends on the structure of the considered economy

Los efectos macroeconómicos del lavado de dinero

The purpose of this research is to study the presence of illegal economy and money laundering processes from a macroeconomic perspective to analyze their economic effects and propose a conceptual framework that identifies its impact in terms of the mechanisms identified. Thus, considering the FATF typology, we analyze the real and monetary effects of each mechanism outlined, differentiating the effects on closed economy generated by elementary and washing circuits of organized crime, from the effects of money laundering in open economy relevant mechanisms of transnational crime

Du refus de vente au don: une explication de la formation du prix par l´affect

This paper aims at explaining observed distinct prices announced by a single supplier for an identical product, in an illegal framework. The modeling proposed here examines an augmented mark-up pricing equation for oligopolistic markets that includes a function of social discrimination. The latter is justified through both sociologic and anthropologic approaches which are taken into account the importance of the degree of personalization that characterizes any exchange, either merchant or non merchant. Such a perspective leads us to conceive prices as transmitting not only a vector of information but also a vector of affect that signals the level of social integration for participants interacting into personal exchanges. Without a legal benchmark, individuals are differentiated by their position in social networks, including family. Given the function of social discrimination, a more complete explanation can be displayed in terms of why a continuum of prices exists for a same illegal good for instance swindling prices, competitive market prices, non-market prices etc. Therefore, by converting each price in a singular expression of a particular exchange, we demonstrate that belonging or not to a social network impacts on price formation in illegal markets, even provides a better understanding of some extreme cases such as refusal of sale or gift exchange