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Shadow Economy: Estimation Methods, Problems, Results and Open questions

Author

Listed:
  • Schneider Friedrich

    (Department of Economics, Johannes Kepler University of Linz, Altenberger Str. 69, 4040 Linz, Austria)

  • Buehn Andreas

    (University of Cooperative Education, Bautzen, Germany)

Abstract
This paper presents various methods used for estimating the size of the shadow economy. Each method is evaluated and its strengths and weaknesses are discussed, as well as results each method yields. The purpose of the paper is threefold: Firstly, to demonstrate that there is no single infallible method for estimating the size and development of the shadow economy and results can differ significantly between different approaches. The MIMIC approach, discussed in greater detail, is often used due to its flexibility. Secondly, the paper discusses the very definition of the shadow economy and factors contributing to its growth. Finally, latest estimations of the size of the shadow economies of 143 countries over the period 1996 to 2014 are presented.

Suggested Citation

  • Schneider Friedrich & Buehn Andreas, 2017. "Shadow Economy: Estimation Methods, Problems, Results and Open questions," Open Economics, De Gruyter, vol. 1(1), pages 1-29, March.
    • Handle: RePEc:vrs:openec:v:1:y:2017:i:1:p:1-29:n:1
    DOI: 10.1515/openec-2017-0001
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    References listed on IDEAS

    as
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