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The Canadian Underground and Measured Economies: Granger Causality Results

David Giles, Lindsay Tedds and Gugsa Werkneh

No 9907, Econometrics Working Papers from Department of Economics, University of Victoria

Abstract: 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.

Keywords: Hidden Economy; Underground Economy; Tax Avoidance; Tax Evasion; Causality (search for similar items in EconPapers)
JEL-codes: C5 H1 H2 (search for similar items in EconPapers)
Pages: 14 pages
Date: 1999-06-23
Note: ISSN 1485-6441.
References: Add references at CitEc
Citations: View citations in EconPapers (16)

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Journal Article: The Canadian underground and measured economies: Granger causality results (2002) Downloads
Working Paper: The Canadian Underground and Measured Economies: Granger Causality Results (2002) Downloads
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