Belgium: Selected Issues

International Monetary Fund

No 2000/049, IMF Staff Country Reports from International Monetary Fund

Abstract: Measuring the size of the underground economy is obviously a difficult task. This paper reviews the literature, as applied to Belgium and elsewhere, on the determinants of the gray economy. The methods that have been used to measure the size of the gray economy are also discussed. The estimates for Belgium are updated using the currency demand approach. The major theory of the gray economy focuses on taxes, which drive a wedge between net incomes and gross labor costs.

Keywords: ISCR; CR; economy; Gray; worker; firm; currency; demand approach; currency-money ratio; demand equation; drive worker; large Gray economy; changes in the gray economy; determinants of Gray economy; Informal economy; Currencies; Social security contributions; Income and capital gains taxes (search for similar items in EconPapers)
Pages: 14
Date: 2000-04-07
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