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The Use of Cash and the Size of the Shadow Economy in Sweden

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Author Info
Guibourg, Gabriela () (Monetary Policy Department, Central Bank of Sweden)
Segendorf, Björn () (International Secretariat, Central Bank of Sweden)
Abstract

We use an “unexplained demand for cash” approach to measure the size of the shadow economy in Sweden. The size of the shadow economy is found to have increased from 3.8 to 6.5 per cent of GDP from 1990 to 2004. This result is also supported by our finding of an increased residual between households’ recorded disposable income and their consumption, investments and changes in net financial positions. Moreover, the correlation between the demand for cash that cannot be explained by recorded transactions and this residual is strong.

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File URL: http://www.riksbank.se/upload/Dokument_riksbank/Kat_foa/2007/wp204.pdf
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Publisher Info
Paper provided by Sveriges Riksbank (Central Bank of Sweden) in its series Working Paper Series with number 204.

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Length: 16 pages
Date of creation: 01 Mar 2007
Date of revision:
Handle: RePEc:hhs:rbnkwp:0204

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Postal: Sveriges Riksbank, SE-103 37 Stockholm, Sweden
Phone: 08 - 787 00 00
Fax: 08-21 05 31
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Web page: http://www.riksbank.com/
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Related research
Keywords: Cash use; demand for cash; shadow economy; National Accounts; Financial Accounts;

Find related papers by JEL classification:
E26 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Informal Economy; Underground Economy
E41 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Demand for Money
H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Schneider, Friedrich, 2005. "Shadow economies around the world: what do we really know?," European Journal of Political Economy, Elsevier, vol. 21(3), pages 598-642, September. [Downloadable!] (restricted)
    Other versions:
  2. Juin-jen Chang & Ching-chong Lai, 2004. "Collaborative tax evasion and social norms: why deterrence does not work," Oxford Economic Papers, Oxford University Press, vol. 56(2), pages 344-368, April. [Downloadable!] (restricted)
  3. Alm, James & Torgler, Benno, 2006. "Culture differences and tax morale in the United States and in Europe," Journal of Economic Psychology, Elsevier, vol. 27(2), pages 224-246, April. [Downloadable!] (restricted)
    Other versions:
  4. Isachsen, Arne Jon & Strom, Steiner, 1985. "The Size and Growth of the Hidden Economy in Norway," Review of Income and Wealth, Blackwell Publishing, vol. 31(1), pages 21-38, March.
  5. Mikael Stenkula, 2004. "The Euro Cash Changeover Process," Kyklos, Blackwell Publishing, vol. 57(2), pages 265-286, 05. [Downloadable!] (restricted)
  6. Wenzel, Michael, 2005. "Misperceptions of social norms about tax compliance: From theory to intervention," Journal of Economic Psychology, Elsevier, vol. 26(6), pages 862-883, December. [Downloadable!] (restricted)
  7. Houston, Joel F., 1990. "The policy implications of the underground economy," Journal of Economics and Business, Elsevier, vol. 42(1), pages 27-37, February. [Downloadable!] (restricted)
  8. Friedrich Schneider & Dominik H. Enste, 2000. "Shadow Economies: Size, Causes, and Consequences," Journal of Economic Literature, American Economic Association, vol. 38(1), pages 77-114, March. [Downloadable!] (restricted)
  9. Humphrey, David & Kaloudis, Aris & Owre, Grete, 2004. "The future of cash: falling legal use and implications for government policy," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 14(3), pages 221-233, July. [Downloadable!] (restricted)
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