Observer-Subject Feedback: The Dynamics Of The Unobserved Economy
AbstractThis paper examines the role of “observer-subject feedback” namely the interaction effect between the social science observer and the subject being observed. When the observer is the government and the subject is a citizen, it is often the case that the subject may have incentives to distort the information given to the observer. When this occurs, information becomes endogenous to the economic system, and distorted information, can in turn have negative feedback consequences when it is used by policymakers to affect the system itself. The underground (unobserved, unrecorded) economy is a prime example of endogenous information bias arising from observer-subject feedback. The paper analyses the dynamics of the unobserved economy and its consequences for our scientific perceptions.
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Bibliographic InfoPaper provided by EconWPA in its series Macroeconomics with number 0501024.
Length: 25 pages
Date of creation: 20 Jan 2005
Date of revision:
Note: Type of Document - pdf; pages: 25
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Underground; unobserved; information distortion; methodology; observer-subject feedback.;
Find related papers by JEL classification:
- D8 - Microeconomics - - Information, Knowledge, and Uncertainty
- B4 - Schools of Economic Thought and Methodology - - Economic Methodology
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-01-23 (All new papers)
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