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Shadow Economy: Definitions, terms & theoretical considerations

Author

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  • Paraskevi Koufopoulou
  • Colin C. Williams
  • Athanassios Vozikis
  • Kyriakos Souliotis

Abstract

The last decades, many scholars highlighted the shadow economic activities, regarding their disadvantages (unemployment, impoverishment etc) and advantages (intensifies competition, flexibility in employment etc). During the financial crisis, informal activities rose in noisy way, which triggered the development of special definitions to describe a wide range of actions which in turn have gradually configured and updated the content of the shadow economy term. In this paper we present the theoretical background of the shadow economy term, by selecting the main worldwide literature published from 1973 to 2018. Many studies have tried to definite the shadow economy term but none has ever presented explicitly the adjectives and nouns that are related to shadow economy. Taking into account this analysis it would be useful for the scholars to mention extensively the theoretical background about shadow economy, the critiques towards the school of thoughts, in order to choose the appropriate term in each case and to design and implement the indicative method to estimate the size of the shadow economy. Â JEL classification numbers: E26

Suggested Citation

  • Paraskevi Koufopoulou & Colin C. Williams & Athanassios Vozikis & Kyriakos Souliotis, 2019. "Shadow Economy: Definitions, terms & theoretical considerations," Advances in Management and Applied Economics, SCIENPRESS Ltd, vol. 9(5), pages 1-3.
    • Handle: RePEc:spt:admaec:v:9:y:2019:i:5:f:9_5_3
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    References listed on IDEAS

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    Cited by:

    1. Xue Wang, 2020. "Mobile Payment and Informal Business: Evidence from China's Household Panel Data," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 28(3), pages 90-115, May.
    2. Imamoglu, Hatice, 2021. "The role of financial development on the underground economy in regards to Europe’s 2020 strategy," Economic Systems, Elsevier, vol. 45(2).
    3. Paraskevi Koufopoulou & Colin C. Williams & Athanassios Vozikis & Kyriakos Souliotis & Antonios Samprakos, 2021. "Estimating Shadow Economy Size in Greece 2000 - 2018: A Flexible MIMIC Approach," SPOUDAI Journal of Economics and Business, SPOUDAI Journal of Economics and Business, University of Piraeus, vol. 71(3-4), pages 23-47, July-Dece.
    4. Younas, Zahid Irshad & Qureshi, Atiqa & Al-Faryan, Mamdouh Abdulaziz Saleh, 2022. "Financial inclusion, the shadow economy and economic growth in developing economies," Structural Change and Economic Dynamics, Elsevier, vol. 62(C), pages 613-621.

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    More about this item

    Keywords

    shadow economy; informal economy; informal sector; shadow banking; tax havens; off shore financial centers.;
    All these keywords.

    JEL classification:

    • E26 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Informal Economy; Underground Economy

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