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Shadow Economies Around the World: Evidence from Metropolitan Areas

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  • Ceyhun Elgin

    (Columbia University)

Abstract

In this paper, I use a calibrated two-sector dynamic general equilibrium model to construct annual estimates of shadow economy size (as a percentage of GDP) for 57 metropolitan areas from 31 countries throughout the world from 2001 to 2016. In addition to fully describing and characterizing the constructed dataset, I also provide some stylized facts regarding the trends of these estimates and some of their correlates. I also use the model to evaluate the effects of two policy tools: Changing the tax burden and tax enforcement.

Suggested Citation

  • Ceyhun Elgin, 2020. "Shadow Economies Around the World: Evidence from Metropolitan Areas," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 46(2), pages 301-322, April.
    • Handle: RePEc:pal:easeco:v:46:y:2020:i:2:d:10.1057_s41302-019-00161-4
    DOI: 10.1057/s41302-019-00161-4
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    2. K K C Sineth Kannangara & Yanrui Wu, 2023. "Shadow Economy in Sri Lanka: A Review and New Estimates," Economics Discussion / Working Papers 23-04, The University of Western Australia, Department of Economics.
    3. Marshall, Emily C. & Saunoris, James & Solis-Garcia, Mario & Do, Trang, 2023. "Measuring the size and dynamics of U.S. state-level shadow economies using a dynamic general equilibrium model with trends," Journal of Macroeconomics, Elsevier, vol. 75(C).
    4. Monica Violeta Achim & Viorela Ligia Văidean & Sorin Nicolae Borlea & Decebal Remus Florescu, 2021. "The Impact of the Development of Society on Economic and Financial Crime. Case Study for European Union Member States," Risks, MDPI, vol. 9(5), pages 1-20, May.

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    More about this item

    Keywords

    Informal sector; Metropolitan areas; Dynamic general equilibrium models; Panel data; Shadow economy; Two-sector dynamic general equilibrium models;
    All these keywords.

    JEL classification:

    • E26 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Informal Economy; Underground Economy
    • J46 - Labor and Demographic Economics - - Particular Labor Markets - - - Informal Labor Market
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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