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Behind the GDP: some remarks on the shadow economy in Mediterranean countries

Author

Listed:
  • Claudio Quintano

    (University of Naples “Parthenope”)

  • Paolo Mazzocchi

    (University of Naples “Parthenope”)

Abstract

It is common knowledge that in the past decades the focus on the shadow economy (SE) has increased and the range in the estimated size of this phenomenon is very divergent. The comprehensive coverage of economic production is important in order to ensure good quality of national accounts and exhaustive estimates of the gross domestic product. The purpose of this paper is to approach the SE by means of the latent variable method and the structural equation model–partial least squares and to explore similar behaviors in terms of the obtained results, by analyzing the subsamples of the countries under observation. Political measures need to be implemented carefully to counter the effects of the SE and policy-makers should have to adopt economic policy practices to drive the SE into the formal economy, particularly in less-developed countries.

Suggested Citation

  • Claudio Quintano & Paolo Mazzocchi, 2018. "Behind the GDP: some remarks on the shadow economy in Mediterranean countries," European Journal of Law and Economics, Springer, vol. 45(1), pages 147-173, February.
    • Handle: RePEc:kap:ejlwec:v:45:y:2018:i:1:d:10.1007_s10657-014-9434-3
    DOI: 10.1007/s10657-014-9434-3
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    More about this item

    Keywords

    Shadow economy; Non-observed economy; Structural equation model; Partial least squares; Latent variable method; Mediterranean countries;
    All these keywords.

    JEL classification:

    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • E26 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Informal Economy; Underground Economy

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