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What is Measuring the Underground Economy about?

This document discusses methods for measuring the underground economy. It focuses on the monetary approach using currency in circulation as a percentage of the money supply (M2) as an indicator. It estimates a currency demand model using variables like taxes, interest rates, GDP growth. The difference between actual and predicted currency ratios gives the size of illegal money, which is multiplied by the velocity of money to estimate the underground economy. Tax evasion is estimated as a percentage of the u

Author

Ayesha Rehman

Language

EN