Regional economic discrepancies and the impact of the underground economy in Romania

Nicoleta-Luminița Popescu
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Nicoleta-Luminița Popescu: Bucharest University of Economic Studies,

Social-Economic Debates, 2023, vol. 12, issue 1, 81-103

Abstract: The article explores the impact of the underground economy in Romania’s regions, using statistical analysis to identify key economic factors. Developed regions with higher GDPs and larger formal workforces have a smaller underground economy, while less developed regions face larger informal sectors, marked by significant income-expenditure discrepancies. The study highlights two main dimensions: overall economic performance and financial imbalances. The findings emphasize the need for region-specific policies, where stronger regions focus on protecting formal economies and weaker regions require stronger interventions to reduce the underground economy and promote formal business practices.

Keywords: Underground economy; regional economy; informal sector; economic discrepancies; gross domestic product (GDP); labor force; principal component analysis (PCA); financial imbalances; economic policy (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:sdb:social:v:12:y:2023:i:1:n:10:p:81-103

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