The Canadian Underground and Measured Economies: Granger Causality Results
Using new time-series data for the size of the Canadian underground economy, we examine the relationship between unreported and measured GDP in that country. Granger causality tests are conducted, with a proper allowance for the non-stationarity of the data. We find that there is clear evidence of such causality from measured GDP to "hidden" output, but only very mild evidence of Granger causality in the reverse direction. This result supports similar evidence for New Zealand reported by the first author, and has several interesting policy implications.
|Date of creation:||23 Jun 1999|
|Contact details of provider:|| Postal: PO Box 1700, STN CSC, Victoria, BC, Canada, V8W 2Y2|
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- David E. A. Giles, 1999.
"Modelling the hidden economy and the tax-gap in New Zealand,"
Springer, vol. 24(4), pages 621-640.
- David E. A. Giles, 1998. "Modelling the Hidden Economy and the Tax-Gap in New Zealand," Econometrics Working Papers 9810, Department of Economics, University of Victoria.
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- David E. A. Giles, & Patrick J. Caragata, 1998. "The Learning Path of the Hidden Economy:Tax and Growth Effects in New Zealand," Econometrics Working Papers 9805, Department of Economics, University of Victoria.
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