Influence of energy prices on the size of shadow economy: a cross country analysis

Ageeva Svetlana () and Nikita Suslov ()

EERC Working Paper Series from EERC Research Network, Russia and CIS

Abstract: We supposed that expenditure growth brought about by an increase of energy price might make it attractive for the firms to hide more taxes and social payments in order to compensate this growth, which could additionally raise the size of shadow economy. To test this hypothesis we, first, used some existing data on the size of the shadow economy for the period of 2000-2003 derived with the help of DYMIMIC model and, secondly, provided our own estimates the share of unofficial sector in GDP using the demand for money method for the period of 2003-2006. Testing both the samples showed a positive correlation between the shadow economy size and the real energy price.

JEL-codes: C21 C23 E26 O13 (search for similar items in EconPapers)
Date: 2009-11-06
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Citations: View citations in EconPapers (2)

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