Velocity of money and shadow economy

Ceyhun Elgin and Ertan Iyidost

Applied Economics Letters, 2022, vol. 29, issue 18, 1741-1745

Abstract: Using two novel datasets of the size of the shadow economy and the velocity of money, this study examines the effect of informality on money velocity. Using a novel annual cross-country panel dataset and covering 104 countries for the period between 1960–2017, the study shows that in countries where the shadow sector size is relatively larger, the velocity of money is also higher. Since the velocity of money has various effects on monetary policy outcomes (e.g. inflation) we believe that this would be crucial for the design of monetary policy as central banks, particularly in countries, where the shadow economy is larger, should take this relationship into account.

Date: 2022
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://hdl.handle.net/10.1080/13504851.2021.1961117 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:apeclt:v:29:y:2022:i:18:p:1741-1745

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RAEL20

DOI: 10.1080/13504851.2021.1961117

Access Statistics for this article

Applied Economics Letters is currently edited by Anita Phillips

More articles in Applied Economics Letters from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().