The shadow economy has long been an area of research for policymakers. The determinants of underground activity of late have been identified as high tax burdens and increased regulation, but has this relationship always existed? This seminal work examines the shadow economy in Norway, Sweden,...

In this paper, first, the MIMIC estimation method is described and criticized and due to a double counting problem a correction is suggested. Second, the measurement methods used for National Accounts Statistics – the discrepancy method and two new micro survey methods – are described and a...

Using the MIMIC method, this paper is a first attempt to estimate the size of the shadow economy of 158 countries over the period 1991 up to 2015. In addition to performing a variety of robustness tests, this paper explicitly addresses endogeneity concerns to the use of GDP as cause and...

We analyze the net issues of the national euro area central banks in relation to the dynamics of the shadow economy within a panel cointegration framework. Besides the total net issues, we distinguish between large, medium and small euro banknotes and take due account of other determinants of...

This paper uses a multiple indicators and multiple causes (MIMIC) model and estimates the extent of corruption in 30 Chinese provinces from 1995 to 2015. Treating corruption as an unobserved latent variable, the MIMIC results show that both government size and public investment have significant...

There is a widespread consensus among the most important players in developed countries (voters, politicians, producers, traditional and green interest groups and bureaucracies) that a shift towards an eco-social market economy is essential for sustainable growth. Nevertheless, market-based...

In this paper we analyze the influence of direct democratic institutions on the size and development of the shadow economies. The framework developed predicts a negative relationship between the degree of direct democracy and the size of the shadow economy. Countries where direct democratic...

Anti-money laundering regulations have been centred on the “Know-Your-Customer” rule so far, overlooking the fact that criminal proceedings that need to be laundered are usually represented by cash. This is the first study which tries to provide an answer to the question of how much of cash...

The Great Tōhoku-Earthquake and the following nuclear meltdown in Fukushima called the world's attention to Japans' energy and climate policy. Japan is one of the biggest emitters of greenhouses gases in the world and still far away from reaching its Kyoto target. Emissions trading systems have...

This paper presents the various methods to estimate the size of the shadow economy, their strengths and weaknesses. The purpose of the paper is twofold. Firstly, it demonstrates that no ideal method to estimate the size and development of the shadow economy exists. Because of its flexibility,...