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Project Team | MULTIMSPROD Meet the ProdTool Project Team Co-Directors Filippo Di Mauro ProdTool Project Coordinator Javier Miranda ProdTool Research Coordinator Eric Bartelsman…
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EU Initiative TSI ProdTool 2025-2028 Find all recent project updates, reports, and event details below: IWH-CompNet 2nd ProdTool Workshop › 21-22 OCTOBER, 2026 - BRUSSELS, BELGIUM…
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IWH Alumni The IWH maintains contact with its former employees worldwide. We involve our alumni in our work and keep them informed, for example, with a newsletter. We also plan…
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Alumni IWH provides guidance and support in job placement after graduation, including letters of recommendation and career advice. Graduates have found placements in academia…
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Overview
About the project Project Information: ProdTool – NPB 2.0: Micro-Data Analysis Tool 2.0 for comparative productivity studies at National Productivity Boards (Project acronym:…
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Internationalisation The Leibniz Institute for Economic Research Halle (IWH) is responsible for economic research and economic policy advice on a scientific basis. The institute…
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Financial Systems: The Anatomy of the Market Economy How the financial system is constructed, how it works, how to keep it fit and what good a bit of chocolate can do. Dossier In…
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People Job Market Candidates Doctoral Students PhD Representatives Alumni Supervisors Lecturers Coordinators Job Market Candidates Tommaso Bighelli Job market paper: "The…
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15.06.2017 • 26/2017
Ailing banks increase leverage of ailing firms
Euro area countries such as Greece and Spain continue to struggle not only with their banks, but also with highly indebted domestic firms. Michael Koetter from the Halle Institute for Economic Research (IWH) and co-authors show the failure to resolve banks’ financial difficulties also prevents debt reduction of over-leveraged firms – and sometimes even contributes to increasing leverage of the weakest firms.
Michael Koetter
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Measuring Income Tax Evasion Using Bank Credit: Evidence from Greece
Nikolaos Artavanis, Adair Morse, Margarita Tsoutsoura
Quarterly Journal of Economics,
Vol. 131 (2),
2016
Abstract
We document that in semiformal economies, banks lend to tax-evading individuals based on the bank’s assessment of the individual’s true income. This observation leads to a novel approach to estimate tax evasion. We use microdata on household credit from a Greek bank and replicate the bank underwriting model to infer the banks estimate of individuals’ true income. We estimate that 43–45% of self-employed income goes unreported and thus untaxed. For 2009, this implies €28.2 billion of unreported income, implying forgone tax revenues of over €11 billion or 30% of the deficit. Our method innovation allows for estimating the industry distribution of tax evasion in settings where uncovering the incidence of hidden cash transactions is difficult using other methods. Primary tax-evading industries are professional services—medicine, law, engineering, education, and media. We conclude with evidence that contemplates the importance of institutions, paper trail, and political willpower for the persistence of tax evasion.
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