To shrink or not to shrink? Shadow economy reversals around the world

Author(s)
Caram, Santiago
Khorana, Sangeeta
Date Issued
June 28, 2022
Subjects
Economia sommersa
Imprenditorialità
Politica fiscale
Abstract
The relationship between shadow economy (SE) and development has been extensively researched. However, there is a lack of consensus on the factors that drive reversals. This paper examines the effect of SE reversals when government collections are affected to changes in productivity, business regulations and financial depth. To this end, drawing on González et.al. (2005; 2017) Panel Smooth Transition Regression (PSTR), we examine the rationale of exclusion and escape theories in Advanced (AE) and Emerging and Developing Economies (EMD). Results show that at a macroeconomic level, both perspectives coexist simultaneously.
Citation
Biagetti M., Caram S., Khorana S. (2022), To shrink or not to shrink? Shadow economy reversals around the world, Roma, Inapp, WP, 88 <https://oa.inapp.org/xmlui/handle/20.500.12916/3572>
URI
Type
Working Paper
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