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Currency Demand, the Underground Economy, and, Tax Evasion—The Case of Guyana


  • Ebrima A Faal


The persistence in Guyana of a substantial underground economy is an important consequence of economic and social policy over 1964-2000. The paper attempts to estimate the magnitude of, and changes to the underground economy in Guyana, as well as its adverse effect on tax collection, during this period.

Suggested Citation

  • Ebrima A Faal, 2003. "Currency Demand, the Underground Economy, and, Tax Evasion—The Case of Guyana," IMF Working Papers 03/7, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:03/7

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    References listed on IDEAS

    1. Lewis, D.E., 1987. "The Economics of Crime: A Survey," Economic Analysis and Policy, Elsevier, vol. 17(2), pages 195-219.
    2. Philip Cagan, 1958. "The Demand for Currency Relative to Total Money Supply," NBER Chapters,in: The Demand for Currency Relative to Total Money Supply, pages 1-37 National Bureau of Economic Research, Inc.
    3. Ben-Zion Zilberfarb, 1986. "Estimates of the Underground Economy in the United States, 1930-80: A Comment on Tanzi," IMF Staff Papers, Palgrave Macmillan, vol. 33(4), pages 790-798, December.
    4. Tanzi, Vito, 1999. "Uses and Abuses of Estimates of the Underground Economy," Economic Journal, Royal Economic Society, vol. 109(456), pages 338-347, June.
    5. Bajada, Christopher, 1999. "Estimates of the Underground Economy in Australia," The Economic Record, The Economic Society of Australia, vol. 75(231), pages 369-384, December.
    6. Dixon, Huw, 1999. "Controversy: On the Use of the 'Hidden Economy' Estimates," Economic Journal, Royal Economic Society, vol. 109(456), pages 335-337, June.
    7. Karl M. Bennett, 1995. "Economic decline and the growth of the informal sector: The Guyana and Jamaica experience," Journal of International Development, John Wiley & Sons, Ltd., vol. 7(2), pages 229-242, March.
    8. Phillip Cagan, 1958. "The Demand for Currency Relative to the Total Money Supply," Journal of Political Economy, University of Chicago Press, vol. 66, pages 303-303.
    9. Schneider, Friedrich, 1986. " Estimating the Size of the Danish Shadow Economy Using the Currency Demand Approach: An Attempt," Scandinavian Journal of Economics, Wiley Blackwell, vol. 88(4), pages 643-668.
    10. Bagachwa, M. S. D. & Naho, A., 1995. "Estimating the second economy in Tanzania," World Development, Elsevier, vol. 23(8), pages 1387-1399, August.
    11. Nickell, Stephen, 1985. "Error Correction, Partial Adjustment and All That: An Expository Note," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 47(2), pages 119-129, May.
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    Cited by:

    1. M. Kabir Hassan & Jung Suk-Yu, 2010. "A Re-examination of the U.S. Underground Economy: Size, Estimation, and Policy Implications," NFI Working Papers 2010-WP-04, Indiana State University, Scott College of Business, Networks Financial Institute.
    2. Judith Gold & Ruben V Atoyan & Cornelia Staritz, 2007. "Guyana; Why Has Growth Stopped? An Empirical Study on the Stagnation of Economic Growth," IMF Working Papers 07/86, International Monetary Fund.
    3. MAURIN Alain & SOOKRAM Sandra & WATSON Patrick Kent, "undated". "Measuring the Size of the Hidden Economy in Trinidad & Tobago," EcoMod2003 330700098, EcoMod.
    4. constantine, collin, 2013. "Why Guyana's self discovery is the missing link in its development strategy," MPRA Paper 44205, University Library of Munich, Germany.
    5. Sergeant, Kelvin & Lugay, Beverly & Dookie, Michele & Alleyne, Dillon & Hendrickson, Michael & Seuleiman, Océane, 2011. "Review of selected areas of research on the Caribbean subregion in the 2000s: identifying the main gaps," Documentos de Proyectos 546, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    6. James Alm & Abel Embaye, 2013. "Using Dynamic Panel Methods to Estimate Shadow Economies Around the World, 1984-2006," Working Papers 1303, Tulane University, Department of Economics.
    7. repec:ksp:journ3:v:4:y:2017:i:2:p:187-211 is not listed on IDEAS
    8. World Bank, 2007. "Guyana - Investment Climate Assessment : Volume 1. Main Findings and Policy Recommendations," World Bank Other Operational Studies 7865, The World Bank.
    9. Magda E. Kandil & Genevieve M Lindow & Mario Mansilla & Joel Chiedu Okwuokei & Jochen M. Schmittmann & Qiaoe Chen & Xin Li & Marika Santoro & Solomon Stavis, 2014. "Labor Market Issues in the Caribbean; Scope to Mobilize Employment Growth," IMF Working Papers 14/115, International Monetary Fund.
    10. Embaye, Abel, 2007. "Underground economy estimates for non-OECD countries using currency demand method, 1984-2005," MPRA Paper 20308, University Library of Munich, Germany.
    11. Downes, Andrew S., 2006. "Caribbean labour market challenges and policies," Macroeconomía del Desarrollo 45, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    12. Dario Cziraky & Max Gillman, 2004. "Inflation and Endogenous Growth in Underground Economies," wiiw Balkan Observatory Working Papers 50, The Vienna Institute for International Economic Studies, wiiw.
    13. Alain Maurin & Sandra Sookram & Patrick Kent Watson, 2006. "Measuring the size of the hidden economy in Trinidad & Tobago, 1973-1999," International Economic Journal, Taylor & Francis Journals, vol. 20(3), pages 321-341.


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