On the economic rationale of estimating the hidden economy

Article Abstract:

A method for estimating the size of the hidden or the black economy was developed. The proposed econometric technique uses a money-demand methodology that utilizes two types of measures, namely, the 'government expenditure function' and the 'durable goods demand function.' The development of the measuring technique has provided hidden economy estimates that can are useful in formulating economic theories and policies and developing econometric models.

User Contributions:

Comment about this article or add new information about this topic:

Comment:  (50-4000 characters)

Name:

E-mail:

Security Code:

Quantifying the black economy: 'measurement without theory' yet again?

Article Abstract:

Most of the existing econometrical methodologies for quantifying the size of the 'hidden' or 'black economy' are flawed because they are based on anecdotal evidence and without clear foundation. These methods are labeled as 'measurement without theory,' and thus, their use as an estimator of the size of the hidden economy will be fruitless and at worst misleading. Hence, economists and legislators are urged to not to rely on these methods.

User Contributions:

Comment about this article or add new information about this topic:

Comment:  (50-4000 characters)

Name:

E-mail:

Security Code:

Uses and abuses of estimates of the underground economy

Article Abstract:

The hidden or black economy is a real phenomenon that has important implications to a country's economic condition. However, existing econometric techniques cannot provide reliable estimates of the size of the underground economy, and thus, governments cannot determine its economic effects. One of the primary reasons for the unreliability of these measures is their vast differences in quantitative magnitudes.

User Contributions:

Comment about this article or add new information about this topic:

Comment:  (50-4000 characters)

Name:

E-mail:

Security Code: