Comment on Measuring the Size of the Shadow Economy Using a Dynamic General Equilibrium Model with Trends

Manuel A. Gómez and Adrián Ríos-Blanco
Authors registered in the RePEc Author Service: Adrián Ríos-Blanco () and Manuel A. Gómez Suárez

Econ Journal Watch, 2022, vol. 19, issue 1, 124–132

Abstract: In their 2018 Journal of Macroeconomics article “Measuring the Size of the Shadow Economy Using a Dynamic General Equilibrium Model with Trends,” Mario Solis-Garcia and Yingtong Xie propose a method for measuring the size and dynamics of the shadow economy. We show that the method does not serve its purpose because once correctly implemented it generates a constant ratio of shadow to formal production, which is equal to a base-year estimate taken from an external source.

Keywords: Shadow economy; dynamic general equilibrium models (search for similar items in EconPapers)
JEL-codes: E26 E32 O17 (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:ejw:journl:v:19:y:2022:i:1:p:124-132

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