IDEAS home Printed from
   My bibliography  Save this article

Application Of Monetary Models For Estimating Underground Economy In Romania



    () (Hyperion University from Bucharest, Romania)


    () (Institute for Economic Forecasting, Romania)


Article addresses the issue of sizing the underground economy by recognized methods in the literature based on empirical data provided by official statistics in Romania. The monetary method to assess non-accounted economy dynamics studies to date has defined two types of measurements in terms of velocity of money. The first is the accountability one, used in banking statistics, calculated by reporting GDP to the money supply from the M2 point of view, and the second was called operational, considered to be the real one, meaning the equivalence between the volume of transactions and the GDP (including commercial credit) which comes for the monetary unit. The relationship between the two methods was achieved by means of a β coefficient, which measures the monetary distortion induced by arrears and the disturbing form of "dollarization" of the economy. Also to be noted that there are not yet adequate information and a suitable algorithm to reasonably approximate the output size of unreported taxable income, of household production for own consumption and of illegal economic activities. Therefore, we must resort to partial estimates, and their use must be considered with care all the conceptual and statistical assumptions on which they rely.

Suggested Citation

  • Corina Maria Ene & Carmen Marilena Uzlau, 2012. "Application Of Monetary Models For Estimating Underground Economy In Romania," New Trends in Modelling and Economic Forecast (MEF 2011), ROMANIAN ACADEMY – INSTITUTE FOR ECONOMIC FORECASTING;"Nicolae Titulescu" University of Bucharest, Faculty of Economic Sciences, vol. 1(1), pages 140-151, January.
  • Handle: RePEc:ntu:ntumef:vol1-iss1-12-140

    Download full text from publisher

    File URL:
    File Function: First version, 2012
    Download Restriction: no

    More about this item


    underground economy; monetary rate method; simple cash demand method; method of transaction;

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • 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


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ntu:ntumef:vol1-iss1-12-140. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Lucian Liviu ALBU). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.