IDEAS home Printed from https://ideas.repec.org/p/rjr/wpiecf/071202.html
   My bibliography  Save this paper

Underground Economy And Fiscal Policies Modeling

Author

Listed:
  • Albu, Lucian Liviu

    () (Institute for Economic Forecasting)

Abstract

Over the last decades a growing concern over the phenomenon of the underground economy has increased attention among officials, politicians, and economists. There are several important reasons why officials and the general public should be concerned in post-communist countries about the real size of the underground economy, as following: an impressive development of underground economy occurred after the collapse of former communist regimes and general liberalization of economic activity; under a growing underground economy, macroeconomics policy is based on mistaken official indicators (such as: income, consumption, unemployment, etc.). In such situation, an extended underground sector may cause severe difficulties to politicians, because it "provides” unreliable official indicators; an accelerated increase in the size of the underground economy, usually caused by a rise in the overall burden of taxes and regulations, may lead to an erosion of the tax base, a decrease in tax receipts and thus to a further rise of the budget deficit (in case of Eastern countries, these are perhaps accentuated due to a weak government bonds market and of a high inflation). First part of this study deals with a critical survey of main approaches of underground (informal) sector in specialized literature; second part focuses on models existing in literature, on their comparative estimating results of the size of underground economy and evaluation of fiscal policy effects. Also, some our results obtained by using specific models to investigate problems of underground economy in East European countries are presented. * This research was undertaken with support from the European Commission's Phare ACE Programme 1994, Contract Number: 94-0139-F.

Suggested Citation

  • Albu, Lucian Liviu, 2007. "Underground Economy And Fiscal Policies Modeling," Working Papers of Institute for Economic Forecasting 071202, Institute for Economic Forecasting.
  • Handle: RePEc:rjr:wpiecf:071202
    as

    Download full text from publisher

    File URL: http://www.ipe.ro/RePEc/WorkingPapers/wpiecf071202.pdf
    Download Restriction: no

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Dobrescu, Emilian, 1996. "Macromodels of the Romanian transition Economy," MPRA Paper 35810, University Library of Munich, Germany.
    2. Lucian-Liviu ALBU, "undated". "A Model to Estimate Informal Economy at Regional Level: Theoretical and Empirical Investigation," Regional and Urban Modeling 284100002, EcoMod.
    3. Albu, Lucian-Liviu & Kim, Byung-Yeon & Duchene, Gerard, 2002. "Households’ activities in informal economy: size and behavioural aspects," MPRA Paper 13072, University Library of Munich, Germany.
    4. Albu, Lucian Liviu & Kim, Byung Yeon & Duchene, Gerard, 2002. "AN ATTEMPT TO ESTIMATE THE SIZE OF INFORMAL ECONOMY BASED ON HOUSEHOLD BEHAVIOUR MODELING (l)," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(1), pages 17-24, March.
    5. Lucian Liviu ALBU & Ion GHIZDEANU & Mărioara IORDAN, 2008. "Informal Economic Estimation Models at Macroeconomic Level. Some Theoretical and Methodologial Considerations," Timisoara Journal of Economics, West University of Timisoara, Romania, Faculty of Economics and Business Administration, vol. 1(2), pages 177-190.
    6. Albu, Lucian-Liviu & Nicolae, Mariana, 2003. "Use of households survey data to estimate the size of the informal economy in Romania," MPRA Paper 14286, University Library of Munich, Germany.
    7. Dobrescu, Emilian, 1998. "Macromodels of the Romanian transition economy, Second edition," MPRA Paper 35825, University Library of Munich, Germany.

    More about this item

    Keywords

    underground economy; Laffer curve; informal activity; fiscal policy; transition;

    JEL classification:

    • E26 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Informal Economy; Underground Economy
    • P26 - Economic Systems - - Socialist Systems and Transition Economies - - - Political Economy
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:rjr:wpiecf:071202. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Corina Saman). General contact details of provider: http://edirc.repec.org/data/ipacaro.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.