Abstract
The paper aims at evaluating the efficiency of traditional Keynesian (demand) or neo-classical (income) policies in the presence of an irregular sector. The analysis is applied to the Belgian economy for which it is shown that the objectives of increasing output and employment and reducing the importance of the irregular economy will often lead to conflicting policy prescriptions. In addition, Keynesian multipliers may be lowered by as much as 40%, though the irregular market only represents some 10 to 15% of total activity.
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