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Economics and “underground” economy theory


  • Cristina VOICU

    (Bucharest Academy of Economic Studies)


Following examination of the theory underlying "underground" economy study I concluded that a good knowledge of the economic thought history is a must for any paper of economic analysis. Subject is sufficiently dramatic by its nature; so I consider it is necessary to bring the scientific perspective. In addition, "underground" economy is an unavoidable ingredient of any economy, the most profitable component of the economy being the "underground" one. Lack of consideration for this component can lead to severe shortfalls of economic analysis leading to the adoption of unrealistic strategies. I support since the beginning of this paper that not the quantitative side will be essentially concerned but epistemic logic. In this paper I propose to elaborate a theory that will mark the right of “underground" economy to exist as a sub-branch of economics. The main argument supporting the need for such an analysis consists of time evidence that shows that "underground" economy is a source of development, subsistence and even escape from the periphery zone for some underdeveloped economies.

Suggested Citation

  • Cristina VOICU, 2012. "Economics and “underground” economy theory," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(7(572)), pages 71-84, July.
  • Handle: RePEc:agr:journl:v:7(572):y:2012:i:7(572):p:71-84

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    References listed on IDEAS

    1. Edward Glaeser & Giacomo Ponzetto & Andrei Shleifer, 2007. "Why does democracy need education?," Journal of Economic Growth, Springer, vol. 12(2), pages 77-99, June.
    2. Dolton, Peter J. & Silles, Mary A., 2008. "The effects of over-education on earnings in the graduate labour market," Economics of Education Review, Elsevier, vol. 27(2), pages 125-139, April.
    3. Kevin Milligan & Enrico Moretti & Philip Oreopoulos, 2003. "Does Education Improve Citizenship? Evidence from the U.S. and the U.K," NBER Working Papers 9584, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Gerasimos T. Soldatos, 2016. "An Anti-Austerity Policy Recipe Against Debt Accumulation in the Presence of Hidden Economy," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 6(2), pages 90-99, February.
    2. Awadh Ahmed Mohammed Gamal & Jauhari B.Dahalan, 2015. "Estimating the Size of the Underground Economy in Saudi: Evidence from Gregory-Hansen Cointegration Based Currency Demand Approach," Abstract of Economic, Finance and Management Outlook, Conscientia Beam, vol. 3, pages 1-6.


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