The growing shadow economy: Implications for stabilization policy

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Not only has the shadow economy obviously been growing much more rapidly than the official economy in the Western industrialised countries, it also appears to have a growth cycle of its own, running counter to the official economy's growth cycle, This raises a number of important questions for stabilization policy, Terms of use: Documents in EconStor may

An Expansion of the Contemporary Theoretical Exposition concerning the Work Disincentive Effects of Government Income Maintenance Programs

“…Though, by its very nature, the size of the underground economy is quite difficult to estimate, researchers who have undertaken such a task have concluded that it is both large and growing [3,4,5,6,7,9]. This phenomenon cannot be suggested through the contemporary theoretical analysis of the (1) If we ignore income taxes the total income (I) or budget constraint is:…”

European economic development—with particular reference to the European periphery

“…The shadow economic sector, playing its role as an Downloaded by [UQ Library] at 04:22 04 November 2014 economic lubricant in shocks absorption and as a social mollifier, increases the political threshold which would lead policy to leave its long-run stabilization path. Be it for regaining or preserving economic stability, the existence of a productive and flexible shadow economy has become more and more a basis for the success of stabilizataion policy" (Cassel 1984), p. 225). The macroeconomic and social stabilizing role of this "hidden sector" has acquired a particular significance in the European periphery, especially in the crisis-affected Mediterranean regions.…”

“…Parallel structures are therefore developing on a level of greater concretion and immediacy; structures which do not displace the established system but, in the presence thereof pursue a course of conflict-ridden co-existence . One of these informal structures is the expanding shadow economy (Frey-Weck 1982, Frey 1983, Cassel 1983, Cassel 1984.…”

Untitled

“…The size of the shadow economy depends on the state and offi cial measurement approach applied in each particular case [Braude 2005]. The shadow economy -that is, underground plus self-service economy -has been growing both in nominal and in real terms much more rapidly than the respective offi cial economy in Western industrialized countries from the 1970s [Cassel 1984]. Such situation was identifi ed especially by 1990s [Schneider 2013].…”