6533b826fe1ef96bd128521a
RESEARCH PRODUCT
Measuring the shadow economy and its drivers: the case of peripheral EMU countries
José Luis Alfonso SánchezJuan SapenaVicent Almenarsubject
Economics and Econometricseuropean economic and monetary unionPerspective (graphical)structural equation modellinglcsh:Regional economics. Space in economicslcsh:HD72-88lcsh:HT388lcsh:Economic growth development planningShadow economy; structural equation modelling; multiple indicators multiple causes models; European Economic and Monetary Unionshadow economyEconomyEconomicsmultiple indicators multiple causes modelsShadow (psychology)description
We adopt a long-run perspective to investigate the size of the shadow economy and explore the trends in this area. The analysis is based on a panel of peripheral EMU countries over the period 1965-2015. Our empirical approach relies on a multiple indicators and multiple causes (MIMIC) framework. This approach is a variant of structural equation modelling (SEM). We used two sets of variables, (i.e. potential determinants and indicator variables) to estimate an underlying (unobserved) index that measures the evolution of the shadow economy. Ascertaining the relative importance of the shadow economy enabled analysis of its relationship with other institutional and social issues (e.g. corruption, productivity and economic growth), and helped identify the channels through which the shadow economy might negatively influence the performance of different economies. In the sampled countries, shadow activity increased over the study period. It also seemed to be affected by the economic cycle.
| year | journal | country | edition | language |
|---|---|---|---|---|
| 2019-12-31 | Ekonomska Istraživanja |