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The hidden economy in Spain - A monetary estimation, 1964-1998

Author

Listed:
  • Mariá Dolores Gadea

    (Departamento de Economi´a Aplicada, Facultad de Económicas, Gran Via, 4, 50005 ZARAGOZA, SPAIN)

  • José Mariá Serrano-Sanz

    (Departamento de Economi´a Aplicada, Facultad de Económicas, Gran Via, 4, 50005 ZARAGOZA, SPAIN)

Abstract

The aim of this paper is to estimate the level and evolution of hidden income in Spain during the period 1964-1997. To this end, we employ the well-known monetary approach which supposes that the hidden economy is a response on the part of the economic agents to the tax burden, one which manifests itself in an excess of demand for currency. The estimation has been made on the basis of the ADL technique, an ECM and Johansen's cointegration approach. The period chosen was characterised by multiple institutional changes, an increase in the tax burden and wide-ranging financial liberalisation. This has obliged us to formulate a specific monetary model to estimate the hidden economy and is one of the original features of that model.

Suggested Citation

  • Mariá Dolores Gadea & José Mariá Serrano-Sanz, 2002. "The hidden economy in Spain - A monetary estimation, 1964-1998," Empirical Economics, Springer, vol. 27(3), pages 499-527.
    • Handle: RePEc:spr:empeco:v:27:y:2002:i:3:p:499-527
    Note: received: February 1999/Final version received: March 2001
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    References listed on IDEAS

    as
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    Cited by:

    1. Rios, Vicente, 2019. "New Evidence on the Size and Drivers of the Shadow Economy in Spain: A Model Averaging Approach," MPRA Paper 97504, University Library of Munich, Germany.
    2. Jerry Marmen Simanjuntak, 2008. "Currency Demand Modeling In Estimating The Underground Economy: A Critique on ‘Excess Sensitivity’ Method and Support for VAR Framework," Working Papers in Economics and Development Studies (WoPEDS) 200806, Department of Economics, Padjadjaran University, revised Sep 2008.
    3. Michael Pickhardt & Jordi Sardà, 2015. "Size and causes of the underground economy in Spain: a correction of the record and new evidence from the MCDR approach," European Journal of Law and Economics, Springer, vol. 39(2), pages 403-429, April.
    4. Breusch, Trevor, 2006. "Australia’s underground economy – redux?," MPRA Paper 9980, University Library of Munich, Germany.
    5. González-Fernández, Marcos & González-Velasco, Carmen, 2015. "Analysis of the shadow economy in the Spanish regions," Journal of Policy Modeling, Elsevier, vol. 37(6), pages 1049-1064.

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    More about this item

    Keywords

    hidden economy · monetary approach;

    JEL classification:

    • E41 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Demand for Money
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes

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