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Předem odsouzeno k neúspěchu: měření šedé ekonomiky tranzitivních zemí pomocí makroekonomických metod
[Mission impossible: measuring the informal sector in a transition economy using macro methods]

Author

Listed:
  • Jan Hanousek
  • Filip Palda

Abstract

An easy and popular method for measuring the size of the underground economy is to use macro-data such as money demand or electricity demand to infer what the legitimate economy needs, and then to attribute the remaining consumption to the underground economy. Such inferences rely on the stability of parameters of the demand equations, or at very least on knowledge of how these parameters are changing. We show that the pace of change of these parameters (such as velocity) is too variable in transition economies for the above methods of estimating the size of the underground economy to be applicable.

Suggested Citation

  • Jan Hanousek & Filip Palda, 2006. "Předem odsouzeno k neúspěchu: měření šedé ekonomiky tranzitivních zemí pomocí makroekonomických metod
    [Mission impossible: measuring the informal sector in a transition economy using macro methods]
    ," Politická ekonomie, University of Economics, Prague, vol. 2006(2), pages 190-203.
  • Handle: RePEc:prg:jnlpol:v:2006:y:2006:i:2:id:552:p:190-203
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    Citations

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    Cited by:

    1. Hana Zídková, 2012. "Discussion of Methods for Estimating the Shadow Economy," Acta Oeconomica Pragensia, University of Economics, Prague, vol. 2012(6), pages 3-17.

    More about this item

    Keywords

    transition; Informal economy; shadow economy; underground economy; macro estimates of shadow economy;

    JEL classification:

    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • H43 - Public Economics - - Publicly Provided Goods - - - Project Evaluation; Social Discount Rate
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

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