Reflections on the meaning and measurement of Unobserved Economies: What do we really know about the "Shadow Economy"

Edgar Feige

MPRA Paper from University Library of Munich, Germany

Abstract: This paper reviews the meaning and measurement of unobserved economies germane to tax evasion and macroeconomic information systems. These include the unreported, non-observed, underground, illegal, informal and unrecorded economies. It reviews the progress and shortcomings of national and international agency efforts to measure these unobserved economies, noting what they have in common, what distinguishes one from another and their interconnections. It then examines the meaning of Professor Schneider’s Shadow Economy (SSE), and the veracity of his claim to have accurately estimated its size and trend worldwide by employing a MIMIC model methodology. It concludes that SSE estimates suffer from conceptual flaws, apparent manipulation of results and insufficient documentation for replication, questioning their place in the academic, policy and popular literature.

Keywords: Tax evasion; shadow economy; non-observed; underground; illegal; informal; unrecorded; MIMIC; cash; National Income and Product Accounts; Friedrich Schneider (search for similar items in EconPapers)
JEL-codes: C51 C82 E26 E41 H26 K42 O17 (search for similar items in EconPapers)
Date: 2016-02-01, Revised 2016-02-01
New Economics Papers: this item is included in nep-iue and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (39)

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Related works:
Working Paper: Reflections on the meaning and measurement of Unobserved Economies: What do we really know about the “Shadow Economy”? (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:69271

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