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SHADOW ECONOMY: THEORETICAL CONCEPT AND METHODS OF QUANTITATIVE EVALUATION

SHADOW ECONOMY: THEORETICAL CONCEPT AND METHODS OF QUANTITATIVE EVALUATION. Dinara Peskova, PhD (Econ.), prof. Russia. Essential features of the shadow economy:. Legality degree A dequacy of covering economic activity in official statistics

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SHADOW ECONOMY: THEORETICAL CONCEPT AND METHODS OF QUANTITATIVE EVALUATION

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  1. SHADOW ECONOMY: THEORETICAL CONCEPT AND METHODS OF QUANTITATIVE EVALUATION Dinara Peskova, PhD (Econ.), prof. Russia

  2. Essential features of the shadow economy: • Legality degree • Adequacy of covering economic activity in official statistics • Agreement/contradiction to the society interests

  3. The most defining economic feature of shadow economy is LACK OF OFFICIAL STATISTICAL CONTROL therefore Shadow economy includes all market-based legal production of goods and services that are deliberately concealed from public authorities

  4. Is shadow economy • structurally independent self-generating system? OR • integral element of the whole economic system?

  5. Methods of measuring the shadow economy • Direct (surveys of citizens and companies, mostly referred to reveal shadow income ) • Indirect (the monetary method; the method of technological indices; the Italian method; balance method; econometric model researches, etc.)

  6. Not a single method of measuring can provide an exact result • Direct methods tend to understatethe results • Indirect methodsoverstate the results *Schneider F., Enste D. (2000) Shadow economies : Size, Causes and Consequences [Текст] // Journal of econ. literature. – Pittsburg. – Vol. 38, №1.

  7. How large is the shadow economy in Russia? • 22% of GDP gives official statics of State Statistical Committee of RF • 40 % of GDP- Ministry of Internal Affairs (Police) RF • 40,6 % of GDP – F. Schneider, A. Buehn, Montenegro (2007) • 50-70 % - evaluations of Russian explorers

  8. How large is the shadow economy in the world?

  9. Credit market behavior method • we offer to measure the shadow income of the population on the basis of average monthly earnings which are mentioned while taking out a loan • the largest shadow income was observed in the construction sphere (35%), in the sphere of wholesale and retail trade (57%), and in the restaurant business (46%).

  10. Restriction of the method: it covers only that part of population which is in need and can afford taking out a loan (does not include the least and the most well-off social class)

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