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

Zangeneh, Hamid (2007): An Estimate of Iran’s Underground Economy: A Monetary Approach. Forthcoming in: comment une économie rentière fonctionne. Le cas de la République islamique d'Iran. (2011)

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.

• Item Type: MPRA Paper
• Language: English
• Keywords: Iranian economy; underground economy; cost of revolution in Iran; black market in Iran; unreported activities in Iran
• Subjects: E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy > E26 - Informal Economy ; Underground Economy

References

Bahmani-Oskooee, Mohsen, “The Black Market Exchange Rate and Demand for Money in Iran,” Journal of Macroeconomics, Amsterdam: Winter 1996. Vol. 18, Iss. 1; pg. 171, 6 pgs

Bajada, Christopher, “Estimates of the Underground Economy in Australia,” Economic Record, vol. 75, pp. 369-485, December 1999.

Chow, Gregory. “On the Long-Run and Short-Run Demand for Money,” Journal of Political Economy, 74, 111-31, April 1966.

Falls, G. A. and Hamid Zangenehzadeh, “An Open Economy Approach to U.S. Demand for Money,” The Journal of Economics, Vol. XII, 82-86, 1986.

Feige, Edgar, “How Big is the underground Economy,” Challenge, pp. 5-13, November-December 1979.

Frey, Bruno and Hannelore Weck, “What produces a Hidden Economy: An International Cross Section Analysis,” Southern Economic Journal, Jan 1983, 49, 3, pp.822-32.

Frey, Bruno and Hannelore Weck, “Estimating the Shadow Economy: A Naïve Approach,” Oxford Economic Papers, pp. 23-43, March 1983.

Goldfeld, Stephen M., “The Demand for Money Revisited, “Brookings Papers on Economic Activity, no. 1, 577-638, 1973.

Firouzeh Khalatbary in Thierry Coville (ed.), The Economy of Islamic Iran: Between State and market, Louvain, Belgium: Peeters for the Institut Francaise de Recherche en Iran (Tehran), 1994.

Amir Kia, Ali F Darratt, Modeling money demand under the profit-sharing banking scheme: Some evidence on policy invariance and long-run stability, Global Finance Journal, Greenwich: 2007. Vol. 18, Iss. 1; pg. 104.

Lippert, Owen and Michael Walker, The Underground Economy: Global Evidence of its Size and Impact, The Fraser Institute, 1997.

Lafleche, Therese, “The Demand for Currency and the Underground Economy,” Bank of Canada Review, pp. 39-59, autumn 1994.

Spire, Peter S., “Monetary Estimates of the Underground Economy: A Critical Evaluation,” The Canadian Journal of Economics, vol. 29, part 1, pp 171-20, April 1996.

Tanzi, Vito, “The Underground Economy in the United States: Estimates and Implications,” Banca Nazionale del Lavora Quarterly Review, 135, pp. 427-53, December 1980a.

Tanzi, Vito, “The Underground Economy built on Illicit Pursuit is Growing: Concern of Economic Policymakers,” IMF Survey, PP. 34-37, 1980b.

Thomas, J. J., “Measuring the Underground Economy: A Suitable Case for Interdisciplinary Treatment,” The American, 33, 5, pp. 621631, May/June 1990.