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Underground Economy Modelling: Simple Models With Complicated Dynamics (Part I)

Author

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  • Albu, Lucian Liviu

    () (Institute for Economic Forecasting, Romanian Academy, Bucharest)

Abstract

The paper aims to model the underground economy using two different models: one based on the labor supply method and a generalized model for the allocation of time. The model based on the labor supply method is conceived as a simulating one in order to determine some reasonable thresholds of the underground sector extension based only on the available macroeconomic statistical data. The generalized model for the allocation of time is a model based on direct approach which estimates the underground economy through extrapolation of the data collected from a limited number of households. Developing the Lemieux model, the map of the entire process of allocation of time was obtained.

Suggested Citation

  • Albu, Lucian Liviu, 2003. "Underground Economy Modelling: Simple Models With Complicated Dynamics (Part I)," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(1), pages 79-85, June.
  • Handle: RePEc:rjr:romjef:v::y:2003:i:1:p:79-85
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    References listed on IDEAS

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    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    underground economy; labor supply method; Laffer curve; allocation of time; Lemieux model;

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • D10 - Microeconomics - - Household Behavior - - - General
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • P36 - Economic Systems - - Socialist Institutions and Their Transitions - - - Consumer Economics; Health; Education and Training; Welfare, Income, Wealth, and Poverty

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