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The size of the underground economy in Germany: a correction of the record and new evidence from the modified-cash-deposit-ratio approach

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  • Michael Pickhardt

    ()

  • Jordi Sarda

    ()

Abstract

Based on the Ahumada et al. (2007, Review of Income and Wealth) critique we revise existing estimates of the size of the German underground economy. Among other things, it turns out that most of these estimates are untenable and that the tax pressure induced size of the German underground economy may be much lower than previously thought. To this extent, German policy and law makers have been misguided during the last three decades. Therefore, we introduce the Modified-Cash-Deposit-Ratio (MCDR) approach, which is not subject to the recent critique and apply it to Germany for the period 1960 to 2008. --

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Bibliographic Info

Article provided by Springer in its journal European Journal of Law and Economics.

Volume (Year): 32 (2011)
Issue (Month): 1 (August)
Pages: 143-163

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Handle: RePEc:kap:ejlwec:v:32:y:2011:i:1:p:143-163

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Web page: http://www.springerlink.com/link.asp?id=100264

Related research

Keywords: Underground economy; Shadow economy; Cash-deposit-ratio; Currency demand approach; MIMIC approach; O17; Q41; C22;

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References

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  15. Vito Tanzi, 1983. "The Underground Economy in the United States: Annual Estimates, 1930-80 (L'économie clandestine aux Etats-Unis: estimations annuelles, 1930-80) (La "economía subterránea" de Estados," IMF Staff Papers, Palgrave Macmillan, vol. 30(2), pages 283-305, June.
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Citations

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Cited by:
  1. Pickhardt, Michael & Sardà, Jordi, 2011. "Cash, hoarding and the underground economy," CAWM Discussion Papers 56, Center of Applied Economic Research Münster (CAWM), University of Münster.
  2. Quintano, Claudio & Mazzocchi, Paolo, 2013. "The shadow economy beyond European public governance," Economic Systems, Elsevier, vol. 37(4), pages 650-670.
  3. Guerino Ardizzi & Carmelo Petraglia & Massimiliano Piacenza & Gilberto Turati, 2011. "Measuring the Shadow Economy with the Currency Demand Approach - A Reinterpretation of the methodology, with an application to Italy," Working papers 22, Former Department of Economics and Public Finance "G. Prato", University of Torino.
  4. Michael Pickhardt & Jordi Sardà, . "Size and causes of the underground economy in Spain: A correction of the record and new evidence from the MCDR approach," Working Papers 201280, Institute of Spatial and Housing Economics, Munster Universitary.
  5. Guerino Ardizzi & Carmelo Petraglia & Massimiliano Piacenza & Gilberto Turati, 2012. "Measuring the underground economy with the currency demand approach: a reinterpretation of the methodology, with an application to Italy," Temi di discussione (Economic working papers) 864, Bank of Italy, Economic Research and International Relations Area.

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