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Estimating shadow economy and tax evasion in Romania. A comparison by different estimation approaches

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  • Dell’Anno, Roberto
  • Davidescu, Adriana AnaMaria

Abstract

The paper aims to estimate the size of shadow economy (SE) and tax evasion (TE) in Romania for the period 2000–2017. We apply different approaches – Multiple Indicator Multiple Cause (MIMIC) model for the estimation of the size of the SE and the currency demand approach for the estimation of TE – in order to lay emphasis on peculiarities of these two phenomena.

Suggested Citation

  • Dell’Anno, Roberto & Davidescu, Adriana AnaMaria, 2019. "Estimating shadow economy and tax evasion in Romania. A comparison by different estimation approaches," Economic Analysis and Policy, Elsevier, vol. 63(C), pages 130-149.
  • Handle: RePEc:eee:ecanpo:v:63:y:2019:i:c:p:130-149
    DOI: 10.1016/j.eap.2019.05.002
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    References listed on IDEAS

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    Cited by:

    1. Gamal, Awadh Ahmed Mohammed & Rambeli, Norimah & Abdul Jalil, Norasibah & Kuperan Viswanathan, K., 2019. "A modified Currency Demand Function and the Malaysian shadow economy: Evidence from ARDL bounds testing approach," Economic Analysis and Policy, Elsevier, vol. 64(C), pages 266-281.

    More about this item

    Keywords

    Shadow economy; Tax evasion; MIMIC model; Currency demand approach; Romania;

    JEL classification:

    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • E26 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Informal Economy; Underground Economy
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • C5 - Mathematical and Quantitative Methods - - Econometric Modeling

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