IDEAS home Printed from https://ideas.repec.org/a/eip/journl/y2015i3p89-103.html
   My bibliography  Save this article

The impact of shadow activities on Ukraine's economic development

Author

Listed:
  • Vasylenko Y.

Abstract

The problem is to create a model of Ukraine's economic development, which would reflect the legal and shadow sectors and provide estimates and forecasts of full (legal plus shadow) resulting indicators: GDP, gross income, wages, exports, imports, etc. And such a causal systemic dynamic model has been created. On this model, the author made a multivariant analysis of the impact of each type of shadow activities (A) the shadow output of each product increases; B) part of wages is paid illegally; С) material costs are overstated; D) prices of public procurement exaggerated; E) State returns VAT for bogus sales both domestically and for export, F) State returns VAT in bad time or incompletely) and their aggregate effect on Ukraine's economy. The most influential factors are the level of illegal production (A) and overstating material (С) expenses. It is revealed that a mere reduction of the amount of shadow transactions without additional economic development would only increase budget revenues and contributions to social insurance funds and pension funds, while reducing at the same time the pace of Ukraine's economic development. To avoid this, the government should use the budget increase for the modernization and development of both non-financial sector and banking system so the latter can resume its former function of more active and cheaper creditor of the production development.

Suggested Citation

  • Vasylenko Y., 2015. "The impact of shadow activities on Ukraine's economic development," Economy and Forecasting, Valeriy Heyets, issue 3, pages 89-103.
    • Handle: RePEc:eip:journl:y:2015:i:3:p:89-103
    as

    Download full text from publisher

    File URL: http://eip.org.ua/docs/EP_15_3_89_uk.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. David Giles, 1997. "Causality between the measured and underground economies in New Zealand," Applied Economics Letters, Taylor & Francis Journals, vol. 4(1), pages 63-67.
    2. Loayza, Norman V., 1996. "The economics of the informal sector: a simple model and some empirical evidence from Latin America," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 45(1), pages 129-162, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Schneider Friedrich & Buehn Andreas, 2017. "Shadow Economy: Estimation Methods, Problems, Results and Open questions," Open Economics, De Gruyter, vol. 1(1), pages 1-29, March.
    2. Friedrich SCHNEIDER, 2016. "Estimating the Size of the Shadow Economy: Methods, Problems and Open Questions," Turkish Economic Review, KSP Journals, vol. 3(2), pages 256-280, June.
    3. David Giles & Lindsay Tedds & Gugsa Werkneh, 2002. "The Canadian underground and measured economies: Granger causality results," Applied Economics, Taylor & Francis Journals, vol. 34(18), pages 2347-2352.
    4. Friedrich Schneider & Friedrich Schneider, 2008. "Shadow Economies and Corruption all over the World: What do we Really Know?," Chapters, in: Michael Pickhardt & Edward Shinnick (ed.), The Shadow Economy, Corruption and Governance, chapter 7, pages 122-187, Edward Elgar Publishing.
    5. Schneider, Friedrich, 2004. "The Size of the Shadow Economies of 145 Countries all over the World: First Results over the Period 1999 to 2003," IZA Discussion Papers 1431, Institute of Labor Economics (IZA).
    6. Vasylenko Yuri V., 2020. "Short-Term Forecast of Ukrainian Economy Including Shadow Sector Using Causal Simulation Model," Ekonomika (Economics), Sciendo, vol. 99(1), pages 131-145, June.
    7. Pablo Duarte, 2017. "The relationship between GDP and the size of the informal economy: empirical evidence for Spain," Empirical Economics, Springer, vol. 52(4), pages 1409-1421, June.
    8. Schneider, Friedrich, 2014. "The Shadow Economy and Shadow Labor Force: A Survey of Recent Developments," IZA Discussion Papers 8278, Institute of Labor Economics (IZA).
    9. Afonso, Oscar & Neves, Pedro Cunha & Pinto, Tiago, 2020. "The non-observed economy and economic growth: A meta-analysis," Economic Systems, Elsevier, vol. 44(1).
    10. Friedrich Schneider, 2005. "Shadow Economies of 145 Countries all over the World: What Do We Really Know?," CREMA Working Paper Series 2005-13, Center for Research in Economics, Management and the Arts (CREMA).
    11. Schneider, Friedrich, 2005. "Shadow economies around the world: what do we really know?," European Journal of Political Economy, Elsevier, vol. 21(3), pages 598-642, September.
    12. Schneider, Friedrich G. & Buehn, Andreas, 2009. "Shadow economies and corruption all over the world: revised estimates for 120 countries," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 1, pages 1-53.
    13. Pierre‐Richard Agénor, 2004. "Macroeconomic Adjustment and the Poor: Analytical Issues and Cross‐Country Evidence," Journal of Economic Surveys, Wiley Blackwell, vol. 18(3), pages 351-408, July.
    14. Owolabi, Adegboyega O. & Berdiev, Aziz N. & Saunoris, James W., 2022. "Is the shadow economy procyclical or countercyclical over the business cycle? International evidence," The Quarterly Review of Economics and Finance, Elsevier, vol. 84(C), pages 257-270.
    15. Mathan Satchi & Jonathan Temple, 2006. "Growth and labour markets in developing countries," Bristol Economics Discussion Papers 06/581, School of Economics, University of Bristol, UK.
    16. Calderón, Valentina & Marinescu, Ioana, 2011. "The Impact of Colombia's Pension and Health Insurance Systems on Informality," IDB Publications (Working Papers) 3831, Inter-American Development Bank.
    17. García Cruz Gustavo Adolfo, 2008. "Informalidad regional en Colombia. Evidencia y Determinantes," Revista Desarrollo y Sociedad, Universidad de los Andes,Facultad de Economía, CEDE, February.
    18. Désirée Teobaldelli, 2011. "Federalism and the shadow economy," Public Choice, Springer, vol. 146(3), pages 269-289, March.
    19. Nino Kokashvili & Irakli Barbakadze & Ketevani Kapanadze, 2017. "How Participating In The Shadow Economy Affects The Growth Of Latvian Firms," University of Tartu - Faculty of Economics and Business Administration Working Paper Series 101, Faculty of Economics and Business Administration, University of Tartu (Estonia).
    20. Sanchez-Pages Santiago & Straub Stéphane, 2010. "The Emergence of Institutions," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 10(1), pages 1-38, September.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eip:journl:y:2015:i:3:p:89-103. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Iryna Bazhal (email available below). General contact details of provider: http://eip.org.ua/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.