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The Complex Dynamics of Social Interactions

In: Foundations and Applications of Complexity Economics

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  • J. Barkley Rosser

    (James Madison University)

Abstract

How large the non-observed economy (NOE) is and what determines its size in different countries and regions of the world is a much studied question (Schneider and Enste, 2000, 2002). The size of this sector in an economy has important ramifications. It negatively affects a nation’s ability to collect taxes to support its public sector, which can lead more economic agents to move into the non-observed sector (Johnson et al. 1997). When this sector is associated with criminal or corrupt activities it may undermine social capital and broader social cohesion (Putnam et al. 1993), which may damage economic growth (Knack and Keefer, 1997; Zak and Knack, 2001). Furthermore, as international aid programs are tied to official measures of the size of economies, these can be distorted by wide variations in the relative sizes of the NOE across different countries, especially among the developing economies.

Suggested Citation

  • J. Barkley Rosser, 2021. "The Complex Dynamics of Social Interactions," Springer Books, in: Foundations and Applications of Complexity Economics, chapter 0, pages 53-68, Springer.
    • Handle: RePEc:spr:sprchp:978-3-030-70668-5_3
    DOI: 10.1007/978-3-030-70668-5_3
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