The effects of the underground economy on economic competitiviness
AbstractA real, almost palpable, connection exists between the official and the underground economy. More than that, both sides of the economy (official and underground) are connected with the competitiveness of a country. Strangely a large presence of undereground in the economy is a sign of competitiveness. Although we would be tempted to say that underground is bad for competitiveness the reality is that due to taxes and regulations the resources (especially the human ones) used ”illegaly” would probably be wasted. In the end the wages from the underground economy return to the oficial one suporting it and hence the competitiveness of the country.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 36025.
Date of creation: 06 Jan 2012
Date of revision:
official economy; underground economy; illegal activities; tax evasion; economic competitiveness;
Find related papers by JEL classification:
- E26 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Informal Economy; Underground Economy
- H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-01-25 (All new papers)
- NEP-CSE-2012-01-25 (Economics of Strategic Management)
- NEP-IUE-2012-01-25 (Informal & Underground Economics)
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