Shadow economy in Palestinian territories using currency demand approach

Purpose The study aims at estimating the shadow economy (SE) using method of demand for currency in Palestine period 2008–2018 by studying relationship between a group variables that affect ratio money traded outside banking system to supply broad sense. Design/methodology/approach has adopted analytical and descriptive research methods estimate SE Palestinian territories. data been obtained from inflation reports issued Monetary Authority ten years, 2008 2018. A standard model was constructed EViews version 8 statistical processing after converting annual quarterly data. Findings authors demonstrated size territories varied over time, average its during reached about $1764.893 (in millions). This amount constitutes 15.5% gross domestic product. provides recommendations reducing Practical implications current shows economics could significantly matter economic policy design policymakers. Originality/value deals directly with Tanzi’s “estimation territories” concept impact on policies.