The Economics of the Shadow Economy

1. Front Matter

   Pages N2-XIV

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2. Conceptual Questions

   1. Front Matter

      Pages 1-1

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   2. The Subterranean Economy, Redux

      • Peter M. Gutmann

      Pages 2-18

   3. The Meaning of the “Underground Economy” and the Full Compliance Deficit

      • Edgar L. Feige

      Pages 19-36

   4. Subterranean Labor Markets: A Conceptual Analysis

      • Bruno Stein

      Pages 37-44

   5. Crime: What Should be Recorded in the National Accounts; and What Difference Would it Make?

      • Derek W. Blades

      Pages 45-58

3. Empirical Evidence

   1. Front Matter

      Pages 59-59

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   2. The Parallel Economy in Austria

      • Jiri Skolka

      Pages 60-75

   3. Measuring the Shadow Economy: The Case of Switzerland

      • Hannelore Weck-Hannemann, Bruno S. Frey

      Pages 76-104

   4. The Unobserved Economy and the National Accounts in the Netherlands a Sensitivity Analysis

      • G. A. A. M. Broesterhuizen

      Pages 105-126

   5. The Relationship between the Formal and Hidden Economies: An Exploratory Analysis for Four Countries

      • Michael O’Higgins

      Pages 127-143

   6. Belgiums’s Irregular Economy

      • Pierre Pestieau

      Pages 144-160

   7. Market Motives in the Informal Economy

      • James D. Smith

      Pages 161-177

4. Theoretical Approaches

   1. Front Matter

      Pages 178-178

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   2. Macroeconomic Policy and the Shadow Economy

      • Benjamin Bental, Uri Ben-Zion, Alois Wenig

      Pages 179-193

   3. Macroeconomic Policy in the Presence of an Irregular Sector

      • V. Ginsburgh, Ph. Michel, F. Padoa Schioppa, P. Pestieau

      Pages 194-217

   4. A Microeconomic Analysis of Black Labour Demand and Supply

      • Peter De Gijsel

      Pages 218-226

   5. The Behavior of Tax Evaders

      • Arne Jon Isachsen, Sven Ove Samuelson, Steinar Strøm

      Pages 227-244

   6. Optimal Tax Evasion & Optimal Tax Evasion Policy Behavioral Aspects

      • Yael Benjamini, Shlomo Maital

      Pages 245-264

   7. The Shadow Economy and Morals: A Note

      • Ekkehart Schlicht

      Pages 265-271

Robbery, larceny, blackmail, fraud, and other crimes with economic motives are likely to be as old as mankind, and the evasion of taxes and economic regulations can be assumed to begin with the introduction of taxes and economic regulations. Thus the shadow economy is certain­ ly not a new phenomenon. However, economists did not pay much attention to it until quite recently. P. GUTMANN in his pioneering article "The Subterranean Economy" (Financial Analysts Journal, Nov/Dec 1977, p. 24- 27) was first to point out that unreported economic activity cannot (or, at least, can no longer) be considered as a "quantite negligeable". Challenged by GUTMANN's hypothesis many economists have then tried to assess the quantitative and qualitative importance of the shadow economy (commonly also known as the underground, or subterranean, or black, or unreported economy, and by other names). There seems to be wide agreement nowadays that the shadow economy has not only reached a substantial portion of total economic activity in both Eastern and Western countries but that it is also growing at rates which can no longer be experienced in the official sector. The existence of a considerable volume of unreported economic activities implies that important macroeconomic variables are biased in the official statistics. The rate of unemployment, for example, may be over-estimated while production figures, on the other hand, tend to be underrated. The government could thus be mislead and choose inadequate policies.

• Economics
• Economy
• Inflation
• Schattenwirtschaft /Bericht
• Schwarzarbeit /Bericht
• production

• Department of Economics, University of Osnabrück, Osnabrück, Germany

  Wulf Gaertner

• Department of Economics, Fernuniversität Hagen, Hagen, Germany

  Alois Wenig

Policies and ethics