Friday, August 4, 2017

Global data shadow economy 1991-2015



LEANDRO MEDINA, George Washington University - Department of Economics, International Monetary Fund (IMF) - Western Hemisphere Department
Email: leandrom@gwu.edu
FRIEDRICH SCHNEIDER, Johannes Kepler University Linz - Department of Economics, CESifo (Center for Economic Studies and Ifo Institute for Economic Research), Institute for the Study of Labor (IZA)
Email: friedrich.schneider@jku.at

Using the MIMIC method, this paper is a first attempt to estimate the size of the shadow economy of 158 countries over the period 1991 up to 2015. In addition to performing a variety of robustness tests, this paper explicitly addresses endogeneity concerns to the use of GDP as cause and indicator, by using the light intensity approach as an indicator variable as proxy for the size of the economy. Results suggest that the average size of the shadow economy of these 158 countries over 1991-2015 is 32.5% of official GDP, which was 34.82% in 1991 and decreased to 30.66% in 2015.

Book p. 21
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