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The Estimation and Policy Implications of the Underground Economy: The Case for Bangladesh

Author

Listed:
  • Hassan , M. Kabir

    (Associate Professor of Finance, Department of Economics and Finance, University of New Orleans LA, USA)

Abstract

The purpose of this research is to estimate the size of the underground economy (henceforth, UE) in Bangladesh, and assess its economic impact. The prior research on this subject has concentrated on the aggregate measurement of UE for developed countries without analyzing the interrelationships among the UE and the formal economy. For example, Cagan (1958), Gutmann (1977), Feige (1979) and Tanzi (1980, 1983), and Porter and Weinbach (1998) examined and estimated the size of the underground economy by using a monetary approach. Shabsigh (1995) estimated the size of Pakistan underground economy. Reza (1989) estimated the size of Bangladesh underground economy by using a survey approach. Using a monetary model, this paper estimates the size of Bangladesh UE economy and then decomposes the size of UE into the domestic, import and export sectors.

Suggested Citation

  • Hassan , M. Kabir, 1997. "The Estimation and Policy Implications of the Underground Economy: The Case for Bangladesh," Bangladesh Development Studies, Bangladesh Institute of Development Studies (BIDS), vol. 25(3-4), pages 151-174, Sept-Dec.
  • Handle: RePEc:ris:badest:0382
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    Cited by:

    1. Md. Kabir Ahmed Chowdhury & G.M. Abul Kalam Azad, 2010. "Consumer Confidence in Financial Markets," Working Papers id:3265, eSocialSciences.

    More about this item

    Keywords

    Underground economies; Income taxes; Gross domestic product; Imports; Economic sectors; Direct taxes; Total taxes; Value added taxes; Estimated taxes; Currency;
    All these keywords.

    JEL classification:

    • A12 - General Economics and Teaching - - General Economics - - - Relation of Economics to Other Disciplines

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