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The shadow economy in Colombia: size and effects on economic growth

Friedrich Schneider () and Bettina Hametner ()

No 2007-03, Economics working papers from Department of Economics, Johannes Kepler University Linz, Austria

Abstract: Using the currency demand approach size and development of the Colombian shadow economy are estimated over the period from 1976 to 2002. In the 70s the size fluctuated around 20% of official GDP and rose to 50% in the 90s. The most important factors driving the shadow economy are unemployment and taxation. Analyzing the interaction between shadow and official economy, the shadow economy has a positive effect on the official one. Average growth rate of real per capita GDP is 1.11% between 1976 and 2002 and the shadow economy "explains" on average between 0.09 and 0.27 of this growth.

Keywords: Colombian shadow economy; currency demand method; taxation; unemployment; interaction between the shadow and official economy (search for similar items in EconPapers)
JEL-codes: O17 O5 D78 H2 H11 H26 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dev and nep-pbe
Date: 2007-01
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Related works:
Journal Article: The Shadow Economy in Colombia: Size and Effects on Economic Growth (2014) Downloads
Working Paper: The Shadow Economy in Colombia: Size and Effect on Economic Growth (2013) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:jku:econwp:2007_03

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