Nonlinearity Between the Shadow Economy and Level of Development /

This paper is the first attempt to directly explore the long-run nonlinear relationship between the shadow economy and level of development. Using a dataset of 158 countries over the period from 1996 to 2015, our results reveal a robust U-shaped relationship between the shadow economy size and GDP p...

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Detalhes bibliográficos
Autor principal: Frank Wu, Dong
Outros Autores: Schneider, Friedrich
Formato: Periódico
Idioma:English
Publicado em: Washington, D.C. : International Monetary Fund, 2019.
coleção:IMF Working Papers; Working Paper ; No. 2019/048
Acesso em linha:Full text available on IMF
Descrição
Resumo:This paper is the first attempt to directly explore the long-run nonlinear relationship between the shadow economy and level of development. Using a dataset of 158 countries over the period from 1996 to 2015, our results reveal a robust U-shaped relationship between the shadow economy size and GDP per capita. Our results imply that the shadow economy tends to increase when economic development surpasses a given threshold or at least does not disappear. Our findings suggest that special attention should be given to the country's level of development when designing policies to tackle issues related to the shadow economy.
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Descrição Física:1 online resource (29 pages)
Formato:Mode of access: Internet
ISSN:1018-5941
Acesso:Electronic access restricted to authorized BRAC University faculty, staff and students