The Hidden Economy

The hidden economy has attracted considerable
attention from not only economists but also
politicians for more than three decades. The hidden
economy has been used as a catchphrase and cited as
a (main) cause of several economic and social
problems. Nevertheless, no concrete answers for its
size and connection with other economic variables
are established. This book addresses these issues to
some extent. It estimates the size of the hidden
economy in Turkey using the Randomized Response
Technique and the MIMIC model and takes a critical
look at the estimates from a variety of methods. It
also develops a latent-variable model framework for
corruption. This differs from the conventional ways
to measure corruption. It then links corruption to
the hidden economy and finds a positive relationship
between the two unobserved variables. The book in
its last chapter reconsiders Blanchard-Quah
decomposition and compares the results of the model
with total output (hidden plus official) with those
of the model with just official output. It concludes
that the existence of the hidden economy has little
impact on the demand management policies to take
effect.

Autorentext

He received his training as an economist at the Universities of Istanbul (B.A.), Colorado (M.A.) and Kansas (Ph.D). He is currently teaching in the Department of Public Finance at Sakarya University. His research on tax amnesties, corruption, hidden economy and immigration has resulted in over 20 publications in journals.

Klappentext

The hidden economy has attracted considerable attention from not only economists but also politicians for more than three decades. The hidden economy has been used as a catchphrase and cited as a (main) cause of several economic and social problems. Nevertheless, no concrete answers for its size and connection with other economic variables are established. This book addresses these issues to some extent. It estimates the size of the hidden economy in Turkey using the Randomized Response Technique and the MIMIC model and takes a critical look at the estimates from a variety of methods. It also develops a latent-variable model framework for corruption. This differs from the conventional ways to measure corruption. It then links corruption to the hidden economy and finds a positive relationship between the two unobserved variables. The book in its last chapter reconsiders Blanchard-Quah decomposition and compares the results of the model with total output (hidden plus official) with those of the model with just official output. It concludes that the existence of the hidden economy has little impact on the demand management policies to take effect.