A Svar Analysis of the Relationship between Romanian Unemployment Rates and the Size of the Shadow Economy
نویسندگان
چکیده
The paper analyses the relationship between shadow economy and unemployment rates using a Structural VAR approach for quarterly data during the period 2000-2010. The size of Romanian shadow economy is estimated using the currency demand approach based on VECM models, stating that its size is decreasing over the analyzed period, from 36.5% at the end of 2000 to about 31.5% of real GDP at the middle of 2010. The relationship between the variables is tested by imposing a long-run restriction in the Structural VAR model to analyze the impact of the shadow economy to a temporary shock in unemployment. The accumulated responses generated by a positive supply shock (unemployment rate) confirms that in the short-run, a rise in both registered and ILO unemployment rates in formal sector will lead to a decrease in the number of people who work in the shadow economy in the second quarter following the initial shock and to an smaller increase in the size of the Romanian shadow economy in the third quarter following the initial shock.
منابع مشابه
Investigating the Relationship between Green Tax Reforms and Shadow Economy Using a CGE Model - A Case Study in Iran
I n the past decades, the effect of different tax amendments on various economic issues has been studied. The majority of these studies have avoided considering shadow economy as part of the calculation and analysis, and an issue, which has received little attention, is the relationship between green tax reforms and shadow economy, as for informal labor, which is well-connected to un...
متن کاملInstitutional Quality, Natural Resource Rent, and Shadow Economy
Natural resource rent affects countries’ economies through various channels. Revenues from the natural resources sales are expected to boost countries' economic growth, but the economic experience of recent decades reveals the numerous economic problems in these countries, the most important of which may be the increase in the shadow economy size. Moreover, the institutions specify the signific...
متن کاملEstimating Shadow Economy and Tax Evasion by Considering the Variables of Government Financial Discipline and Behavioral Factors in Iran’s Economy
L ow tax incomes and the large size of the government in Iran lead into budget deficit, which increases the inflation rate. It also causes economic instability and fluctuations in inflation, leading to tax non-compliance and the transfer of people to the informal economy. Therefore, considering the variables of financial discipline and behavioral factors, this research examines the e...
متن کاملThe Shadow Economy and Globalization: A Comparison Between Difference GMM and System GMM Approaches
In a general classification, the economy of any country is divided into two parts of official and invisible economies. Invisible activities drop outside the scope of the law and official economy and strongly affect socioeconomic development and the formal sector of all countries.These activities which are known under various titles including the shadow economy are influenced by various factors....
متن کاملThe Effect of Corruption on Shadow Economy: An Empirical Analysis Based on Panel Data
Quite often shadow economy (SE) and corruption are seen as "twins", which need each other or fight against each other and theoretically can be either complements or substitutes. Therefore, the relationship between SE and corruption has been a controversial and polemical issue and in the spotlight of a remarkable collection of economists and social researchers. The main objective of this study ...
متن کامل