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An Estimate of Iran’s Underground Economy: A Monetary Approach

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  • Zangeneh, Hamid

Abstract

It is important to note that in rationalizing the low GDP, there are those who believe that the officially reported GDP is only a part of the total actual real GDP. That is, some believe that a large part of Iranian economy is not reported. Therefore, there is a great deal of underground (unreported) economic activities in Iran that are not included in the reported data. Even though one cannot deny the existence of this unofficial underground economy, it cannot be shown that they are not included in the official data reported by the Central Bank of Iran. Therefore, we can safely assume that, by all approximations, the official data to be a good representative of actual real Iranian economy and the proposition of much larger economy due to the existence of a large underground economy beyond and in addition to the officially published data is, more or less, an exaggeration.

Suggested Citation

  • Zangeneh, Hamid, 2007. "An Estimate of Iran’s Underground Economy: A Monetary Approach," MPRA Paper 26619, University Library of Munich, Germany, revised 2009.
    • Handle: RePEc:pra:mprapa:26619
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    File URL: https://mpra.ub.uni-muenchen.de/26619/1/MPRA_paper_26619.pdf
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    References listed on IDEAS

    as
    1. Peter S. Spiro, 1996. "Monetary Estimates of the Underground Economy: A Critical Evaluation," Canadian Journal of Economics, Canadian Economics Association, vol. 29(s1), pages 171-175, April.
    2. Stephen M. Goldfeld, 1973. "The Demand for Money Revisited," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 4(3), pages 577-646.
    3. Thérèse Laflèche, 1994. "The demand for currency and the underground economy," Bank of Canada Review, Bank of Canada, vol. 1994(Autumn), pages 39-58.
    4. Frey, Bruno S & Weck, Hannelore, 1983. "Estimating the Shadow Economy: A 'Naive' Approach," Oxford Economic Papers, Oxford University Press, vol. 35(1), pages 23-44, March.
    5. Gregory C. Chow, 1966. "On the Long-Run and Short-Run Demand for Money," Journal of Political Economy, University of Chicago Press, vol. 74(2), pages 111-111.
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    Cited by:

    1. Zangeneh, Hamid, 2010. "Iran: Past, Present and the Future," MPRA Paper 26283, University Library of Munich, Germany.

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    More about this item

    Keywords

    Iranian economy; underground economy; cost of revolution in Iran; black market in Iran; unreported activities in Iran;
    All these keywords.

    JEL classification:

    • E26 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Informal Economy; Underground Economy

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