IDEAS home Printed from https://ideas.repec.org/a/taf/intecj/v33y2019i4p679-695.html
   My bibliography  Save this article

The Economic Growth–Inflation–Shadow Economy Trilogy: Developed Versus Developing Countries

Author

Listed:
  • Nedra Baklouti
  • Younes Boujelbene

Abstract

This study investigates the nexus among the economic growth–inflation–shadow economy trilogy by including the role of political stability for a sample of 33 developed and 14 developing countries over the 2005–2016 period. For the OECD countries, our results showed a bidirectional nexus among economic growth and the size of the shadow economy while the causality running from economic growth to inflation, on the one hand, and from inflation to the informal economy, on the other hand, is unidirectional. As for the MENA panel, the relationship between inflation and the underground economy remains bidirectional, while the relationship running from inflation to economic growth, on the one hand, and from the informal economy to economic growth, on the other hand, is unidirectional. With the introduction of political stability, the nexus among the informal economy and the inflation in the OECD countries becomes unidirectional running from inflation to the shadow economy. However, in the case of MENA countries, controlling for political stability reduces the magnitude of the coefficient of the shadow economy on inflation. We note that with a low level of political stability, countries facing the large size of the informal sector will shift their financing from taxes to seigniorage.

Suggested Citation

  • Nedra Baklouti & Younes Boujelbene, 2019. "The Economic Growth–Inflation–Shadow Economy Trilogy: Developed Versus Developing Countries," International Economic Journal, Taylor & Francis Journals, vol. 33(4), pages 679-695, October.
    • Handle: RePEc:taf:intecj:v:33:y:2019:i:4:p:679-695
    DOI: 10.1080/10168737.2019.1641540
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/10168737.2019.1641540
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/10168737.2019.1641540?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Rümeysa Çelik & Abdurrahman Keskin & Abdulkadir Keskin, 2021. "Türkiye’de Ekonomik Büyüme, İşsizlik ve Enflasyonun Kayıt Dışı İstihdam Üzerindeki Etkisi: ARDL Sınır Testi Yaklaşımı," Journal of Social Policy Conferences, Istanbul University, Faculty of Economics, vol. 0(80), pages 451-474, June.
    2. Loudi Njoya & Ibrahim Ngouhouo & Simplice A. Asongu & Friedrich Schneider, 2022. "The role of economic prosperity on informality in Africa: evidence of corruption thresholds from PSTR," Working Papers of the African Governance and Development Institute. 22/012, African Governance and Development Institute..
    3. Loudi Njoya & Ibrahim Ngouhouo & Moussa Njoupouognigni & Schneider Friederich & Zenabou Tourere, 2024. "Can we understand the simultaneous evolution between economic and informality growth in Africa? A preliminary explanation," Journal of International Development, John Wiley & Sons, Ltd., vol. 36(1), pages 398-414, January.
    4. Korhan K. Gokmenoglu & Aysel Amir, 2023. "Investigating the Determinants of the Shadow Economy: The Baltic Region," Eastern European Economics, Taylor & Francis Journals, vol. 61(2), pages 181-198, March.
    5. Canh, Nguyen Phuc & Thanh, Su Dinh, 2020. "Financial development and the shadow economy: A multi-dimensional analysis," Economic Analysis and Policy, Elsevier, vol. 67(C), pages 37-54.
    6. Onwuka , Ifeanyi & Ayeni, Emmanuel, 2023. "Financial Development and Shadow Economy in Africa: Evidence from Panel Quantile Regression," Journal of Economic Development, The Economic Research Institute, Chung-Ang University, vol. 48(2), pages 123-141, June.
    7. Khalil Mhadhbi & Chokri Terzi, 2022. "Shadow economy threshold effect in the relationship finance–growth in Tunisia: A nonlinear autoregressive distributed lag approach," Journal of International Development, John Wiley & Sons, Ltd., vol. 34(3), pages 636-651, April.

    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:taf:intecj:v:33:y:2019:i:4:p:679-695. 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.

    We have no bibliographic references for this item. You can help adding them by using 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: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/RIEJ20 .

    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.