Informal and underground economy

There is a widespread feeling that a substantial and increasing share of activities take place outside the official economy. This holds, in particular, for developing and transition but also for high income economies. Such activities are unrecorded by the system of national income accounting, which has become the accepted standard in all countries of the world. The existence and increase of an underground economy gives rise to three major sets of concerns. The economic and social conditions of individuals, household and countries are evaluated in a biased way if one relies on the official statistics. Thus, the official number of unemployed persons may hide that an (unknown) share of them actually work and receive wage income. As a consequence, the macro economic policies are likely to be too expansionary and social policy too excessive. A second concern is the loss of tax revenue as underground activities escape taxation. A third concern interprets the underground economy as an indicator of an unhealthy state between citizens and government. The taxpayers are dissatisfied with what public services they get for their contributions and seek to restress the balance by evading to the underground economy. It is feared that such reaction makes government unable to finance the public goods necessary for an economy and society. In contrast, opponents of government welcome such a development.

Tax Rates and Tax Evasion: An Empirical Analysis of the Structural Aspects and Long-Run Characteristics in Italy

By using official time series of the Italian evaded VAT base (Ministry of Finance) for the period 1980-2004 we investigate empirically the long-run characteristics of tax evasion and the relationship with the tax burden. We focus on three important issues not analyzed so far. First, using different measures of aggregate economic activity as reference variables in estimating the average tax burden, we investigate the size and dynamics of the over-burden traceable back to tax evasion. Second, exploiting cointegration techniques, we quantify the elasticity between tax evasion and the average tax rate in Italy. We then comment on the complex dynamic interaction between tax burden and tax evasion, to ascertain whether in the Italian experience there is evidence for any “vicious circle” between them.tax evasion, VAT evasion, effective tax rate, apparent tax rate, VECM

Tax rates and Tax evasion: an Empirical Analysis of the Structural Aspects and Long-Run Characteristics in Italy

By using official time series of the Italian evaded VAT base (Ministry of Finance) for the period 1980-2004 we investigate empirically the long-run characteristics of tax evasion and the relationship with the tax burden. We focus on three important issues not analyzed so far. First, using different measures of aggregate economic activity as reference variables in estimating the average tax burden, we investigate the size and dynamics of the over-burden traceable back to tax evasion. Second, exploiting cointegration techniques, we quantify the elasticity between tax evasion and the average tax rate in Italy. We then comment on the complex dynamic interaction between tax burden and tax evasion, to ascertain whether in the Italian experience there is evidence for any "vicious circle" between them.tax evasion, VAT evasion, effective tax rate, apparent tax rate, VECM

Visual Integration of Data and Model Space in Ensemble Learning

Ensembles of classifier models typically deliver superior performance and can outperform single classifier models given a dataset and classification task at hand. However, the gain in performance comes together with the lack in comprehensibility, posing a challenge to understand how each model affects the classification outputs and where the errors come from. We propose a tight visual integration of the data and the model space for exploring and combining classifier models. We introduce a workflow that builds upon the visual integration and enables the effective exploration of classification outputs and models. We then present a use case in which we start with an ensemble automatically selected by a standard ensemble selection algorithm, and show how we can manipulate models and alternative combinations.Comment: 8 pages, 7 picture

Localised edge states nucleate turbulence in extended plane Couette cells

We study the turbulence transition of plane Couette flow in large domains where localised perturbations are observed to generate growing turbulent spots. Extending previous studies on the boundary between laminar and turbulent dynamics we determine invariant structures intermediate between laminar and turbulent flow. In wide but short domains we find states that are localised in spanwise direction, and in wide and long domains the states are also localised in downstream direction. These localised states act as critical nuclei for the transition to turbulence in spatially extended domains.Comment: 15 pages, 5 figure

UV Light Reveals the Diversity of Jurassic Shell Colour Patterns: Examples from the Cordebugle Lagerstätte (Calvados, France)

Viewed under UV light the diverse and exceptionally well-preserved molluscs from the Late Jurassic Cordebugle Konservat Lagerstätte (Calvados, Normandy, France) reveal fluorescent fossil shell colour patterns predating the oldest previously known instance of such patterns by 100 Myr. Evidently, residual colour patterns are observable in Mesozoic molluscs by application of this non-destructive method, provided the shells are not decalcified or recrystallized. Among 46 species which are assigned to twelve gastropod families and eight bivalve families, no less than 25 species yielded positive results. Out of nine colour pattern morphologies that have been distinguished six occur in gastropods and three in bivalves. The presence of these variant morphologies clearly indicates a significant pre-Cenozoic diversification of colour patterns, especially in gastropods. In addition, the occurrence of two distinct types of fluorescence highlights a major difference in the chemical composition of the pigments involved in colour pattern formation in gastropods. This discovery enables us to discriminate members of higher clades, i.e. the Vetigastropoda emitting red fluorescence from the Caenogastropoda and Heterobranchia emitting whitish-beige to yellow fluorescence. Consequently, fluorescent colour patterns may help to allocate part of the numerous enigmatic Mesozoic gastropod taxa to their correct systematic position