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What is the relationship between Unofficial and Official Economy? An analysis in Latin American Countries

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Author Info

  • Roberto Dell'Anno

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Abstract

This paper analyzes the relationship between unofficial economy (UE) and official GDP. Through the study of the UE within an institutional comprehensive empirical framework, a positive correlation is found between unofficial and official GDP. Empirical evidence on the procyclicality of UE supports the conclusion that the two sectors are rather complements than substitutes for Latin American countries. Then UE is considered as beneficial to sustain economic growth. Suggestions for economic policy and hints for further research are also offered.

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File URL: http://www.dsems.unifg.it/q232008.pdf
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Bibliographic Info

Paper provided by Dipartimento di Scienze Economiche, Matematiche e Statistiche, Universita' di Foggia in its series Quaderni DSEMS with number 23-2008.

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Length: 20 pages
Date of creation: Dec 2008
Date of revision:
Handle: RePEc:ufg:qdsems:23-2008

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Keywords: Unofficial economy; Economic Development; Latin America; Institutions.;

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Cited by:
  1. Roberto Dell'Anno & Ferda Halicioglu, 2010. "An ARDL model of unrecorded and recorded economies in Turkey," Journal of Economic Studies, Emerald Group Publishing, vol. 37(6), pages 627-646, September.
  2. Andreas Buehn & Roberto Dell'Anno & Friedrich Schneider, 2013. "Fiscal illusion and the shadow economy: Two sides of the same coin?," Economics working papers 2013-21, Department of Economics, Johannes Kepler University Linz, Austria.
  3. Roberto Dell’Anno, 2010. "Institutions and human development in the Latin American informal economy," Constitutional Political Economy, Springer, vol. 21(3), pages 207-230, September.
  4. Duarte, Pablo, 2014. "The relationship between GDP and the size of the informal economy: Empirical evidence for Spain," Working Papers 127, University of Leipzig, Faculty of Economics and Management Science.
  5. Dan Andrews & Aida Caldera Sánchez & Åsa Johansson, 2011. "Towards a Better Understanding of the Informal Economy," OECD Economics Department Working Papers 873, OECD Publishing.

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