Unemployment, underground economy and economic growth in a matching model of behavioural economics

The main aim of this theoretical paper was to show that a matching model of behavioural economics is able to shed light on important and intricate economic relationships such as those among unemployment, underground economy and growth. Precisely, it will show that in a trustful society the underground economy and unemployment are low and growth is high, whereas in a distrustful society the underground economy is high, unemployment is reduced only in the short run, and long-run growth is low.