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Analysis of the Shadow Economy in the Czech Republic and a Process Model for its Prevention

Author

Listed:
  • Milan Douša

    (Pavol Jozef Šafárik University in Košice, Faculty of Public Administration, Popradská 66, 040 11 Košice, Slovak Republic)

  • Darina Koreňová

    (Pavol Jozef Šafárik University in Košice, Faculty of Public Administration, Popradská 66, 040 11 Košice, Slovak Republic)

  • Jana Džunová

    (Pavol Jozef Šafárik University in Košice, Faculty of Public Administration, Popradská 66, 040 11 Košice, Slovak Republic)

Abstract

The shadow economy represents a significant aspect of economic reality in every country. It operates alongside the official economy but remains unrecorded in official statistics. The primary aim of this contribution is to estimate the size of the shadow economy in the Czech Republic and to explain possible sources of inaccuracies in these estimates. A custom estimate of the shadow economy in the Czech Republic will be using the currency demand method, followed by a comparative analysis of the results, and a process model for its prevention will be proposed. This contribution presents an exploration of the shadow economy over the period from 1993 to 2023, with a prediction of the current situation. These findings contribute to a better understanding of the shadow economy phenomenon and provide valuable insights for public policy formulation.

Suggested Citation

  • Milan Douša & Darina Koreňová & Jana Džunová, 2026. "Analysis of the Shadow Economy in the Czech Republic and a Process Model for its Prevention," Acta Universitatis Bohemiae Meridionalis, University of South Bohemia in Ceske Budejovice, Faculty of Economics, vol. 29(1), pages 1-17.
    • Handle: RePEc:boh:actaub:v:29:y:2026:i:1:p:1-17
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    Keywords

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    JEL classification:

    • E26 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Informal Economy; Underground Economy
    • E41 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Demand for Money
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics

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