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Estimating the Size of the Shadow Economy: Methods, Problems and Open Questions

Friedrich Schneider and Andreas Bühn
Authors registered in the RePEc Author Service: Andreas Buehn

No 4448, CESifo Working Paper Series from CESifo Group Munich

Abstract: This paper presents the various methods to estimate the size of the shadow economy, their strengths and weaknesses. The purpose of the paper is twofold. Firstly, it demonstrates that no ideal method to estimate the size and development of the shadow economy exists. Because of its flexibility, the MIMIC method used to get macro-estimates of the size of the shadow economy is discussed in greater detail. Secondly, the paper focuses on the definition and causal factors of the shadow economy as well as on a comparison of the size of the shadow economy using different estimation methods.

Keywords: shadow economy estimates; MIMIC approach; methods to estimate the shadow economy; advantages and disadvantages of the measurement methods (search for similar items in EconPapers)
JEL-codes: D78 E26 H20 H11 H26 K42 O50 O17 (search for similar items in EconPapers)
Date: 2013
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