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.

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 Raising the Accuracy of Shadow Economy Measurements

2021 ◽  
Vol 239 (4) ◽  
pp. 71-125
Author(s):  
Vicente Ríos ◽  
◽  
Antonio Gómez ◽  
Pedro Pascual ◽  
◽  
...  
Keyword(s):  
Bayesian Model ◽  
Latent Variable ◽  
Bayesian Model Averaging ◽  
Shadow Economy ◽  
Electricity Consumption ◽  
Model Averaging ◽  
Hidden Sector ◽  
Multiple Indicators ◽  
Econometric Methods ◽  
Currency Demand

This article estimates the size of the shadow economy in a Spanish region (Navarre) for the period 1986- 2016. To this end, we employ indirect macro-econometric methods such as the Currency Demand approach, Electricity Consumption (Physical Input) methods and the multiple indicators multiple causes (MIMIC) approach. A differential feature of our empirical analysis is that we incorporate various methodological innovations (e..g. Bayesian Model Averaging, a Time-Varying Parameter model, normalization of the latent variable) to refine and increase the measurement accuracy of each of the indirect methods considered. The temporal pattern of the shadow economy’s size that emerges from the different approaches is similar, which suggests that the estimates obtained are robust and capture the underlying dynamics of the hidden sector. After quantifying the shadow economy, we analyze its determinants by means of Bayesian Model Averaging techniques. We find that the evolution of the shadow economy in Navarre can be explained by a small and robust set of factors, specifically the tax burden, the share of employment in the construction sector, the inflation rate, euro area membership and the ratio of currency outside the banks to M1.

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.

Shadow economy in a turbulent environment: evidence from Poland

2018 ◽  
Vol 21 (3) ◽  
pp. 328-339 ◽  
Author(s):  
Bogdan Mróz
Keyword(s):  
Informal Sector ◽  
Tobacco Industry ◽  
Shadow Economy ◽  
Driving Forces ◽  
Economic Activities ◽  
Think Tank ◽  
Content Type ◽  
Economic Agents ◽  
Insight Into

Purpose The purpose of this paper is to provide an empirical insight into the functioning of the informal sector in Poland and highlight the reasons for involvement of economic agents in the new forms of the shadow economy. Design/methodology/approach The paper is focused on the analysis of different manifestations of unregistered economic activities in Poland. The author draws upon the latest available research findings on the subject including shadow economy estimates. Finally, the case study analysis of the tobacco industry in Poland has been used to exemplify and highlight the driving forces conducive to the expansion of the informal sector. Findings The informal sector’s share of the Polish economy in the years 2010-2015 was put as ranging between 12.1 per cent gross domestic product (GDP) and 14.5 per cent GDP (with the peak in 2013) by the GUS (Polish Main Statistical Office), between 19.2 per cent GDP and 21.1 per cent GDP by the IBnGR think tank (peak in 2012) and between 23.3 per cent and 25.4 per cent GDP by Professor F. Schneider. Research limitations/implications The case study of the tobacco industry, although well illustrates the dynamics of the shadow economy, does not provide a comprehensive picture of the Poland’s informal sector. Practical implications The paper provides tips and recommendations aimed at reducing the size of the shadow economy. Social implications Reducing the size of the informal sector could strengthen the social integrity and cohesion. Originality/value The paper provides insight into new areas and manifestations of the shadow economy in Poland exemplified by the case study of the tobacco industry.

scholarly journals The informal sector in the structure of the national economy: Simulation and evaluation

2020 ◽  
Vol 7 (3) ◽  
pp. 292-304
Author(s):  
Olga Lizina ◽  
Dinara Bistyaykina ◽  
Eka Ermakova ◽  
Tatyana Badokina ◽  
Tatiana Solovyeva
Keyword(s):  
Economic Development ◽  
Factor Analysis ◽  
Russian Federation ◽  
National Economy ◽  
Shadow Economy ◽  
Mimic Model ◽  
Government Regulations ◽  
The Russian Federation ◽  
Simulation And Evaluation ◽  
The Impact

The research into the shadow economy has scientific and practical value. Any state is interested in evaluating the size of the shadow economy as it affects the goals and priorities of the country’s development. This study presents a model for evaluating the shadow economy in the Russian Federation. The authors developed and analyzed an approach to measuring the shadow economy based on factor analysis and a MIMIC model. The study features the factor analysis of the official statistics for Russia over the period from 1992 to 2019, with more than 150 indicators characterizing different spheres of the life of the country. The authors determined the factors affected by the shadow economy, built a MIMIC model on this basis, and estimated the size of the shadow economy in Russia. Assessing the size of shadow activity is important for analyzing economic development and the impact of government regulations on the shadow sector

scholarly journals SPECIAL SYSTEM REGIMES OF TAXATION IN THE FORMATION OF INVESTMENT POTENTIAL BY SMALL BUSINESSES: PROBLEMS AND PROSPECTS

2020 ◽  
pp. 6-18
Author(s):  
И.А. Журавлева
Keyword(s):  
Economic Policy ◽  
Economic Development ◽  
Small Businesses ◽  
Multiple Regression Model ◽  
Economic Activities ◽  
The Subject ◽  
Tax Reporting ◽  
Regional Budgets ◽  
The Impact ◽  
Regions Of Russia

Рассматривая инвестиционный аспект в срезе применения специальных системных режимов налогообложения (ССРН) субъектами малого предпринимательства (СМП) в регионах, необходимо отметить актуальность данной проблемы. Стратегическими задачами экономической политики страны является выравнивание уровней развития регионов России и выполнение национальных проектов в стране. Налоговый потенциал, являясь комплексным макроэкономическим потенциалом каждого субъекта федерации, содержит в себе не только показатели финансово-экономического развития, но и инвестиционную привлекательность. Системность специальных режимов налогообложения хозяйственной деятельности СМП играет свою финансовую роль как в формировании бюджетов регионов, так и инициируя инвестиционную привлекательность в субъект, имея в своем ресурсе преференциальную основу минимальных налоговых баз и ставок, упрощения процедур администрирования и налоговой отчетности. Предложена авторская множественная регрессионная модель, показывающая влияние применения малым бизнесом ССРН на инвестиционную привлекательность в регионе. Considering the investment aspect in the context of the application of special systemic taxation regimes (SSTR) by small businesses (SMEs) in the regions, it is necessary to note the urgency of this problem. The strategic tasks of the country's economic policy are to level the levels of development of the regions of Russia and the implementation of national projects in the country. Tax potential, being the complex macroeconomic potential of each constituent entity of the Federation, contains not only indicators of financial and economic development, but also investment attractiveness. The systematic nature of special taxation regimes for the economic activities of the SMEs plays its financial role both in the formation of regional budgets and in initiating investment attractiveness in the subject, having in its resource a preferential basis of minimum tax bases and rates, simplification of administration procedures and tax reporting. The author proposes a multiple regression model showing the impact of small business use of the SSTR on the investment attractiveness in the region.

scholarly journals Innovative Mechanisms to Counteract Risks and Threats to Foreign Economic Security of the Region

2018 ◽  
Vol 7 (3.15) ◽  
pp. 267
Author(s):  
Tatyana Anatolievna Kulagovskaya ◽  
Anna Alexandrovna Ter-Grigoryants ◽  
Natalia Vladimirovna Maslennikova ◽  
Evgenia Nikolaevna Kovtun ◽  
Lyudmila Vladimirovna Slavnetskova
Keyword(s):  
Economic Development ◽  
Federal District ◽  
Foreign Market ◽  
Economic Security ◽  
Negative Consequences ◽  
North Caucasus ◽  
Economic Activities ◽  
The North ◽  
Macroeconomic Indicators ◽  
The Impact

The article assesses the impact of internal and external factors on the economic security of the region in foreign trade activities. Negative consequences of the foreign economic activities on economic security of the Stavropol Territory are analyzed. Types of the risks enterprises may face when entering the foreign market are considered. Protectionist arguments in favor of pursuing a free trade policy are presented and argued, which implies a staged formation of a mechanism to efficiently counteract threats to the external economic security of the region.The study considers the level and dynamics of the main macroeconomic indicators of the subjects of the North Caucasus Federal District as compared to the average Russian achievements, the resource potential, problems of the economic development of the macroregion, prerequisites for the formation of the state policy on supporting the region. It substantiates the top priority directions of long-term socio-economic development of subjects in order to overcome the pervasive arrearage of the economy and social area.  

scholarly journals The Impact of Oil Prices on Economic Activity: The Case of Azerbaijan

2020 ◽  
Vol 14 (2) ◽  
pp. 39
Author(s):  
Shahin V. B. ◽  
Jamila G. M. ◽  
Fargana G. M. ◽  
Nazim Hajiyev
Keyword(s):  
Economic Policy ◽  
Economic Activity ◽  
Oil Prices ◽  
World Market ◽  
Sustainable Growth ◽  
High Tech ◽  
Investment Activity ◽  
Macroeconomic Indicators ◽  
The Government ◽  
The Impact

The strategic purpose of the economic policy of Azerbaijan is to ensure sustainable growth. The external factors including oil prices in the world market and investments have a significant influence on economic activity in Azerbaijan. The relationship between oil prices and gross domestic product has been scrutinized and the sensitivity of macroeconomic indicators to oil prices has been investigated. The dependence of investment activity, including foreign investments on oil prices has been determined. In the research, econometric models have been constructed in the purpose of studying the impact of oil prices on key macroeconomic indicators from the qualitative and quantitative point of view. At the same time, a comparative analysis of oil reserves of Azerbaijan with other oil countries has been conducted. According to the results, the government should determine new and sustainable growth pillars based on risks emerged from oil price, improve economic policy and accelerate the transition to innovative high-tech models of economic development.

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..

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