scholarly journals ECONOMIC FLUCTUATIONS AND THE SHADOW ECONOMY: A GLOBAL STUDY

2020 ◽  
Vol 20 (03) ◽  
pp. 2050015
Author(s):  
CANH P. NGUYEN ◽  
CHRISTOPHE SCHINCKUS ◽  
DINH SU THANH
Keyword(s):  
Capital Investment ◽  
Shadow Economy ◽  
Economic Fluctuations ◽  
Economic Activities ◽  
Macroeconomic Policies ◽  
Middle Income ◽  
Economic Instability ◽  
Gdp Growth Rate ◽  
Stabilizing Factors ◽  
The Impact

The recent economic crisis re-emphasizes the importance of the economic fluctuations. This study investigates the role of shadow economy in combination with economic factors on the economic instability for 133 economies between 1991 and 2015. Using the system-GMM estimations, this paper shows that a larger shadow economy increases the fluctuations of GDP growth rate in relation to the size and the volatility of shadow economy. Notably, the shadow economy presents an inverted-U relationship with economic instability and this relationship is strongest for low- and lower-middle income economies. Our results identify two categories of drivers for economic fluctuations: the stabilizing factors (the labor force and the TFP) and the enhancing factors (capital investment, consumption, government spending, trade, and FDI inflows). Interestingly, exports increase economic fluctuations while imports decrease them. Finally, we discuss the differences in the determinants of economic instability across low, middle and high incomes countries. This study documented that shadow economy influences the economic fluctuations — our results actually confirm our hypothesis and the impact of shadow economy on the effectiveness of macroeconomic policies. The contribution of this paper is to show the extent to which the impact can affect the economic activities and how institutions can smooth this effect.

Economic Fluctuations and the shadow Economy: A global study

2020 ◽  
Author(s):  
Nguyen Canh ◽  
Christophe Schinckus ◽  
Su Di Thanh
Keyword(s):  
Capital Investment ◽  
Shadow Economy ◽  
Labour Force ◽  
Economic Fluctuations ◽  
Middle Income ◽  
Fdi Inflows ◽  
Economic Instability ◽  
Gdp Growth Rate ◽  
Stabilizing Factors

Abstract The recent economic crisis re-emphasizes the importance of the economic fluctuations. This study investigates the role of shadow economy in combination with economic factors on the economic instability for 133 economies between 1991 and 2015. Using the system-GMM estimations, this article shows that a larger shadow economy increases the fluctuations of GDP growth rate in relation to the size and the volatility of shadow economy. Notably, the shadow economy presents an inverted-U relationship with economic instability and this relationship is strongest for low- and lower-middle income economies. Our results identify two categories of drivers for economic fluctuations: the stabilizing factors (the labour force and the TFP) and the enhancing factors (capital investment, consumption, government spending, trade and FDI inflows). Interestingly exports increase economic fluctuations while imports decrease them. Finally, we discuss differences in the determinants of economic instability across low, middle and high incomes countries.

The specifics of shadow economic activity in Russia

2020 ◽  
Vol 19 (10) ◽  
pp. 1896-1915
Author(s):  
E.R. Ermakova ◽  
O.M. Lizina
Keyword(s):  
Economic Activity ◽  
Shadow Economy ◽  
Integrated Approach ◽  
Economic Activities ◽  
Reproductive Process ◽  
Scientific Methods ◽  
Current Period ◽  
Russian Economy ◽  
Analysis And Synthesis ◽  
The Impact

Subject. The article addresses the specifics of shadow economic activities in reformed Russia in the context of systemic transformations. Objectives. We focus on determining the role of shadow economy in the reproductive process, identifying and understanding the specifics of underground economic activity of the Russian economy. Methods. The study rests on general scientific methods (scientific abstraction, unity of historical and logical, analysis and synthesis, induction and deduction, comparison and analogy) and special methods of cognition (monetary methods). We employ the systems and integrated approach. The official statistics, regulations, works of leading researchers on shadow economy expansion, resources of reference and legal systems like Garant and ConsultantPlus serve as the study's information base. Results. We present a retrospective rapid analysis of the extent of shadow economic activity in the domestic economy, establishing the relationships with the processes that take place at different stages of the country's development. We also reveal the specifics of shadow economy relations in Russia, factors that play a key role in expansion for a particular period, a shift to another form of shadow economy. The study characterizes the current period of development, assesses the impact of external shocks on shadow economy expansion. Conclusions. The current period is characterized by the digitization of shadow relations, the shift of corruption to the upper echelons of power, the continued outflow of capital abroad, and increased penalties for underground activities.

scholarly journals The Shadow Economy in Pakistan: An Analysis with MIMIC Model

2021 ◽  
Vol 9 (3) ◽  
pp. 340-350
Author(s):  
Attiqa Jabbar ◽  
Javed Iqbal
Keyword(s):  
Economic Policy ◽  
Latent Variable ◽  
Shadow Economy ◽  
Driving Forces ◽  
Economic Activities ◽  
Mimic Model ◽  
Multiple Indicators ◽  
Macroeconomic Indicators ◽  
The Impact ◽  
Business Freedom

This paper explicitly presents the estimation of the size and development of the shadow economy. The study examines the impact of multiple exogenous causes (observed variables) on the shadow economy (latent variable) and the size of the shadow economy influencing the performance of multiple macroeconomic indicators. In order to accomplish this econometric analysis, a MIMIC Model (Multiple Indicators Multiple Causes Model) is applied over the period 2011 to 2021. The results indicate that the tax burden, business freedom, unemployment rate, and Gross Domestic Product are the key driving forces of the shadow economy in Pakistan. The findings are potentially beneficial for the policymakers in identifying and dealing with the shadow economic activities as well as developing the strategies relevant to the economic policy.

Review of Russia’s Crony Capitalism: The Path from Market Economy to Kleptocracy by Anders Åslund

2021 ◽  
Vol 59 (1) ◽  
pp. 220-243
Author(s):  
Michael Alexeev
Keyword(s):  
Market Economy ◽  
Fiscal Federalism ◽  
Detailed Examination ◽  
Economic Activities ◽  
Macroeconomic Policies ◽  
Comprehensive Description ◽  
Large State ◽  
Russian Economy ◽  
Crony Capitalism ◽  
The Impact

Anders Åslund provides a comprehensive description of the main political and economic events of Vladimir Putin’s 20 years at the helm of the country. In politics, Åslund shows how Putin skillfully maneuvered to destroy democracy in Russia. I argue that the “cultural backlash” by older generations played perhaps an even more important role. I also show that the young generations hold rather liberal values, thus providing hope for the future. In economics, Åslund focuses on large state corporations, assets of Putin’s cronies, and macroeconomic policies, with only general statements about the country’s institutional weakness. I complement Åslund’s analysis by a more detailed examination of the impact of institutions and briefly survey fiscal federalism and informal economic activities—issues without which the workings of the Russian economy are hard to understand. (JEL D72, H77, O52, P26, P35)

How successful countries are in promoting digital transactions during COVID-19

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Hoda Mansour
Keyword(s):  
Commercial Banks ◽  
Policy Response ◽  
Economic Activities ◽  
Middle Income ◽  
Content Type ◽  
Government Effectiveness ◽  
Middle Income Countries ◽  
Digital Transactions ◽  
Financial Transactions ◽  
The Impact

PurposeThis paper aims to assess whether the coronavirus disease 2019 (COVID-19) pandemic has encouraged governments to take actions towards fostering digital means of payments and financial transactions to stimulate economic activities and achieve higher financial inclusion.Design/methodology/approachUsing a logit model, this paper tests the impact of the level of income and GDP per capita, government effectiveness, digital adoption, number of commercial banks and the pandemic-related closure of business and stores due to full lockdowns on governments’ policy response regarding digital means of payments.FindingsThe author finds that low- and lower-middle-income countries had significantly responded to the surged need for digital means of payment during the pandemic compared to the upper-middle-income and high-income countries. The author also finds that government effectiveness and the number of commercial banks were predictors of government policy response, while the full lockdown of countries and the overall digital adoption were not.Research limitations/implicationsData of the post-COVID-19 pandemic are limited, and the sample size is small.Originality/valueThis is the first paper to empirically model governments' response during the pandemic to promote digital means of payments. This paper gives insight into post-crisis potential changes in digital payment adoption in the upcoming years.

The impact of the shadow sector of transport services on the economic development of Ukraine’s regions

2021 ◽  
Vol 93 (2) ◽  
pp. 103-115
Author(s):  
Iryna Babets ◽  
Wiesława Caputa
Keyword(s):  
Economic Development ◽  
Regression Analysis ◽  
Panel Data ◽  
Economic Activity ◽  
Shadow Economy ◽  
Economic Activities ◽  
Services Sector ◽  
Transport Services ◽  
The Impact

The article analyses aspects of illegal operations in the Ukrainian market of transport services associated with the main types of transport and their relationship with other areas of unreported economic activity. The extent of the shadow sector in the market of transport services in the regions of Ukraine in 2013-2019 was estimated by calculating the shadow economy coefficient for economic activities classified as “Transport, warehousing, postal and courier activities” using the so-called “method of unprofitable enterprises”. The correlation between the coefficient of the shadow economy in the market of transport services and the main indicators of economic development is estimated using regression analysis involving panel data for different regions of Ukraine in the period of 2013-2019. In order to improve the method of assessing the extent of the shadow economy in the transport services sector, a method is proposed which takes into account differences between volume of services provided and consumed.

scholarly journals UNDERGROUND ECONOMY DALAM SEBUAH PERSPEKTIF

2020 ◽  
Vol 2 (2) ◽  
pp. 1-8
Author(s):  
Aloysius Hari Kristianto ◽  
Dedy ◽  
Bona Fentura
Keyword(s):  
Economic Activity ◽  
Shadow Economy ◽  
Good Governance ◽  
Empirical Studies ◽  
Underground Economy ◽  
Economic Activities ◽  
Goods And Services ◽  
Labor Market Regulations ◽  
The Impact

This article aims to describe the activities of underground economic actors. This article is a literature review of several empirical studies in Indonesia and the world in examining or resolving the impact of the existence of these economic activities. There are several terms used in each country from the underground economy, such as black economy, shadow economy and unofficial economy. Every country, both developed and developing countries, have experienced underground economic activity that continues to increase so that biased measurement often occurs, which is caused by indicators of underground economy that cannot be measured clearly and this economic activity can harm state revenues. The driving force of the underground economy is an increase in the tax burden (directly or indirectly), combined with labor market regulations and the quality of public goods and services, as well as properly measured economic conditions. The need for systematic oversight to reduce the number of corruption by providing convenience to the community through the E-Government program as a direction for the creation of Good Governance..

The impact of economic crisis on mental and physical health in Italy

2017 ◽  
Vol 14 (02) ◽  
pp. 103-110
Author(s):  
S. Tomassi ◽  
M. Ruggeri
Keyword(s):  
Mental Health ◽  
Physical Health ◽  
Economic Crisis ◽  
Social Determinants ◽  
Great Recession ◽  
Economic Recession ◽  
Behavioural Disorders ◽  
Economic Activities ◽  
The Impact ◽  
Mental And Physical Health

Summary Background: The global crisis that began in 2007 has been the most prolonged economic recession since 1929. It has caused worldwide tangible costs in terms of cuts in employment and income, which have been widely recognised also as major social determinants of mental health (1, 2). The so-called “Great Recession” has disproportionately affected the most vulnerable part of society of the whole Eurozone (3). Across Europe, an increase in suicides and deaths rates due to mental and behavioural disorders was reported among those who lost their jobs, houses and economic activities as a consequence of the crisis.

Impact of external currency exposures on macroeconomic policies

2020 ◽  
pp. 23-40
Author(s):  
I. V. Prilepskiy
Keyword(s):  
Monetary Policy ◽  
Exchange Rate ◽  
Positive Impact ◽  
Exchange Rate Regime ◽  
Macroeconomic Policies ◽  
Panel Regressions ◽  
Financial Account ◽  
Currency Exposure ◽  
Cross Country ◽  
The Impact

Based on cross-country panel regressions, the paper analyzes the impact of external currency exposures on monetary policy, exchange rate regime and capital controls. It is determined that positive net external position (which, e.g., is the case for Russia) is associated with a higher degree of monetary policy autonomy, i.e. the national key interest rate is less responsive to Fed/ECB policy and exchange rate fluctuations. Therefore, the risks of cross-country synchronization of financial cycles are reduced, while central banks are able to place a larger emphasis on their price stability mandates. Significant positive impact of net external currency exposure on exchange rate flexibility and financial account liberalization is only found in the context of static models. This is probably due to the two-way links between incentives for external assets/liabilities accumulation and these macroeconomic policy tools.

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