Reflections on the meaning and measurement of Unobserved Economies: What do we really know about the “Shadow Economy”?

Feige, Edgar L. (2015): Reflections on the meaning and measurement of Unobserved Economies: What do we really know about the “Shadow Economy”? Forthcoming in: Journal of Tax Administration , Vol. 1, No. 2 (March 2016)

Abstract

This paper reviews the meaning and measurement of unobserved economies germane to tax evasion and macroeconomic information systems. These include the unreported, non-observed, underground, illegal, informal and unrecorded economies. It reviews the progress and shortcomings of national and international agency efforts to measure these unobserved economies, noting what they have in common, what distinguishes one from another and their interconnections. It then examines the meaning of Professor Schneider’s Shadow Economy (SSE), and the veracity of his claim to have accurately estimated its size and trend worldwide by employing a MIMIC model methodology. It concludes that SSE estimates suffer from conceptual flaws, apparent manipulation of results and insufficient documentation for replication, questioning their place in the academic, policy and popular literature.

• Item Type: MPRA Paper
• Language: English
• Keywords: Tax evasion, shadow economy, non-observed, underground, illegal, informal, unrecorded, MIMIC, cash, National Income and Product Accounts, Friedrich Schneider.
• Subjects: C - Mathematical and Quantitative Methods > C5 - Econometric Modeling > C51 - Model Construction and Estimation; C - Mathematical and Quantitative Methods > C8 - Data Collection and Data Estimation Methodology ; Computer Programs > C82 - Methodology for Collecting, Estimating, and Organizing Macroeconomic Data ; Data Access; E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy > E26 - Informal Economy ; Underground Economy; E - Macroeconomics and Monetary Economics > E4 - Money and Interest Rates > E41 - Demand for Money; H - Public Economics > H2 - Taxation, Subsidies, and Revenue > H26 - Tax Evasion and Avoidance; K - Law and Economics > K4 - Legal Procedure, the Legal System, and Illegal Behavior > K42 - Illegal Behavior and the Enforcement of Law; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O17 - Formal and Informal Sectors ; Shadow Economy ; Institutional Arrangements

References

Ahumada, H. Alvaredo, F. & Canavese, A. (2007). The Monetary Method and the Size of the Shadow Economy: A Critical Assessment. Review of Income and Wealth, 53(2), 363-371.

Allingham, M.G. & Sandmo, A. (1972). Income Tax Evasion: A Theoretical Analysis, Journal of Public Economics, 1,323-338.

Alm, J. (1996). What is an “optimal tax system? National Tax Journal 49(1), 117-133.

ATKearney, Schneider, F. & VISA (2010) The Shadow Economy in Europe, 2010 :Using electronic payments systems to combat the shadow economy. http://media.hotnews.ro/media_server1/document-2011-05-8-8602544-0-shadow.pdf

ATKearney, VISA & Schneider, F. (2013) The Shadow Economy in Europe, 2013. AT Kearney. https://www.atkearney.com/documents/10192/1743816/The+Shadow+Economy+in+Europe+2013.pdf

Bajada, C. & Schneider, F. (2005). The Shadow Economies of the Asia-Pacific. Pacific Economic Review 10(3), 379-401.

Bajada, C. & Schneider, F. (2009). Unemployment and the Shadow Economy in the OECD. Revue économique, 60(5), 1033-1067.

BEA, Bureau of Economic Analysis, (2009). U.S Department of Commerce, Concepts and methods of the U.S. national Income and Product Accounts, (Chapters 1-5).

Black, T., Bloomquist, K., Emblom, E. Johns, A., Plumley, A. & Stuk, E. (2012). Federal Tax Compliance Research; Tax Year 2006 Tax Gap Estimation, Washington, D.C. IRS Research, Analysis & Statistics.

Blinder, A. S. & Rudd, J. B. (2012). The Supply-Shock Explanation of the Great Stagflation Revisited. In NBER Chapters, The Great Inflation: The Rebirth of Modern Central Banking, National Bureau of Economic Research, Inc.

Bollen, K.A. (1989) Structural Equations with Latent Variables, John Wiley & Sons, New York.

Bovi, M. & Dell’Anno, R. (2010). The changing nature of the OECD shadow economy, Journal of Evolutionary Economics, 20 (1), 19-48.

Breusch, T. (2005a). The Canadian Underground Economy: An Examination of Giles and Tedds, Canadian Tax Journal 53 (2), 367-391.

Breusch, T. (2005b). Estimating the Underground Economy using MIMIC Models, Australian National University, Working Paper, Canberra. http://econ.unimelb.edu.au/SITE/workshops/ Breusch.pdf.

Breusch, T. (2005c). Fragility of Tanzi’s method of estimating the underground economy, Center for Social Research, The Australian National University

Breusch, T. (2006a). Book Review of Size, Causes and Consequences of the Underground Economy: An International Perspective Edited by Bajada, C. & Schneider, F., The Economic Record, The Economic Society of Australia, 82(259), 492-494.

Breusch, T. (2006b) Australia’s Underground Economy - Redux? http://mpra.ub.uni-muenchen.de/9980/.

Buehn, A. & Farzanegan, M.R. (2013). Impact of education on the shadow economy. Economics Bulletin, AccessEcon. 33(3), 2053-2063.

Buehn, A., Lessmann, C. & Markwardt, G. (2013). Decentralization and the shadow economy: Oates meets Allingham--Sandmo. Applied Economics, 45(18), 2567-2578.

Buehn, A. & Schneider, F. (2008). MIMIC Models, Cointegration and Error Correction: An Application to the French Shadow Economy, Cesifo Working Paper No. 2200, Munich.

Buehn, A. & Schneider, F. (2012a). Shadow economies around the world: novel insights, accepted knowledge, and new estimates, International Tax and Public Finance 19, 139–171.

Buehn, A. & and Schneider, F. (2012b). “Corruption and the shadow economy: like oil and vinegar, like water and fire? International Tax and Public Finance 19, 172–194.

Cagan, P. (1958). The Demand for Currency Relative to the Total Supply of Money, Journal of Political Economy, 66(3), 302-328.

Campbell, D. T. (1975). Assessing the impact of planned social change, In G. Lyons (Ed.), Social research and public policies: The Dartmouth/OECD Conference (Chapter 1, 3-45), Hanover, NH: Dartmouth College, The Public Affairs Center.

Carpenter, J. & Matthews, P. (2005). Norm Enforcement: Anger, Indignation or Reciprocity? Middlebury College Economics Discussion Paper No. 05-03, Middlebury College, Vt.

Carson, C. (1984). The Underground Economy: An Introduction, Survey of Current Business May, 21-37.

Charmes, J. (2012). The Informal Economy Worldwide: Trends and Characteristics, The Journal of Applied Economic Research, 6(2), 103–132.

Charmes, J. (2014). How to incorporate informal sector data into National Accounts: A Guidebook, Africa Centre of Statistics, Addis Ababa: UNECA.

Ciupagea, C. (2004). Contributions of the informal activities to the Romanian economy, In R. Neef and P. Adair (Eds.) Informal Economies and Social Transformation in Romania, LIT Verlag, Münster.

Cowell, F. (1990). Cheating the Government. Cambridge: MIT Press.

Dell’Anno, R. (2003). Estimating the Shadow Economy in Italy: a Structural Equation Approach: Working Paper No. 2003-07, University of Aarhus. Denmark.

Dell‘Anno, R. (2007). The Shadow Economy in Portugal: An analysis with the Mimic Approach, Journal of Applied Economics, Vol. X (2), 253-277.

Dell‘Anno, R. (2008). What is the relationship between Unofficial and Official Economy? An analysis in Latin American Countries, European Journal of Economics, Finance and Administrative Sciences, 12, 185-203.

Dell’Anno, R. (2015). Analyzing the Determinants of the Shadow Economy with a “Separate Approach”: An Application of the Relationship between Inequality and the Shadow Economy, World Development, Article in Press. http://dx.doi.org/10.1016/j.worlddev.2015.08.026

Dell’ Anno, R. & Schneider, F. (2003). The Shadow Economy of Italy and other OECD countries: What do we know? Journal of Public Finance and Public Choice, 21(2-3) 97-120.

Dell’ Anno, R. & Schneider, F. (2006). Estimating the Underground Economy using MIMIC Models: A Response to T. Breusch’s critique, Working Paper No. 0607, Department of Economics, Johannes Kepler University of Linz.

Dell’ Anno, R. & Teobaldelli, D. (2015). Keeping both corruption and the shadow economy in check: the role of decentralization, International Tax and Public Finance, 22(1), 1-40.

D’Hernoncourt, J. & Méon, P. J. (2012). The not to dark side of trust: Does trust increase the size of the shadow economy? Journal of Economic Behavior & Organization, 81, 97-121.

Dobozi, I. & Pohl, G. (1995). Real Output Decline in Transition Economies- Forget GDP, Try Power Consumption Data, Transition Newsletter, 6(1-2), 17-18.

Dreher, A., Kotsogiannis C. & McCorriston, S. (2009). How do institutions affect corruption and the shadow economy? International Tax and Public Finance 16(6), 773–796.

Dreher, A., Méon, P. J. & Schneider, F. (2014). The devil is in the shadow: Do institutions affect income and productivity or only official income and official productivity? Public Choice, 158(1), 121-141.

Eilat, Y., & Zinnes, C. (2002). The evolution of the shadow economy in transition countries: The consequences for economic growth and donor assistance, CAER II Discussion Paper No. 8, 1-70.

Elgin, C. (2013). Internet usage and the shadow economy: Evidence from panel data, Economic Systems 37 (1), 111-121.

Elgin, C. & Oztunali, O. (2014). Pollution and informal economy, Economic Systems, 38(3), 333-349.

Enste, D. (2010a). Regulation and the shadow economy, Constitutional Political Economy 21(3): 231-248.

Enste, D. (2010b). Shadow Economy - The Impact of Regulation in OECD-countries, International Economic Journal, 24(4), 55-571.

Epstein, R. (1995). Simple Rules for a Complex World, Cambridge, MA: Harvard University Press.

Ericson, R. (1984). The ’Second Economy’ and Resource Allocation under Central Planning, Journal of Comparative Economics, 8(1), 1-24.

European Commission. (2013a). 2012 Update report to the Study to quantify and analyze the VAT Gap in the EU-27 Member States, TAXUD , TAXUD/2013/DE/321, pp. 1-65.

European Commission. (2013b). Study to quantify and analyze the VAT gap in the EU-27 Member States, TAXUD/2012/DE316, Warsaw, pp 1-127.

European Commission. (2015). Study to quantify and analyze the VAT Gap in the EU Member States, 2015 Report, TAXUD/2013/DE321, 1-64.

ESA, European system of national and regional accounts in the Community, (1996). Council Regulation (EC) No 2223/93, Official Journal of the European Communities, No. L 310/1.

Euorstat, IMF, OECD, UN. (1993). System of National Accounts, Brussels/Luxembourg, New York, Paris, Washington, xlix + 711pp.1-814.

Feige, E. L. (1979). How Big is the Irregular Economy? Challenge, 22(1), 5-13.

Feige, E. L. (1980). Macroeconomics and the Unobserved Sector, International Symposium on Taxation,. August 28, 1980, In W. Block and M. Walker (Eds.), Taxation: An International Perspective, Vancouver, British Columbia, Canada, The Fraser Institute, 1984.

Feige, E.L. (1986). A Reexamination of the “Underground Economy” in the United States: A Comment on Tanzi, Staff papers, International Monetary Fund 33(4), 768-81.

Feige, E. L. (1989a). The Underground Economies: Tax Evasion and Information Distortion. Cambridge, Cambridge University Press.

Feige, E. L. (1989b). Currency velocity and cash payments in the U.S. Economy: The Currency Enigma, Munich Personal RePEc Archive Paper 13807, http;//mpra.ub.uni-muenchen.de/13807/

Feige, E. L. (1990). Defining and Estimating Underground and Informal Economies: The New Institutional Economics Approach, World Development 18(7), 989-1002.

Feige, E. L. (2003a). Dynamics of Currency Substitution, Asset Substitution and De facto Dollarization and Euroization in Transition Countries, Comparative Economic Studies, Palgrave Macmillan, 45(3), 358-383.

Feige, E. L. (2003b). Unofficial Dollarization in Latin America: Currency Substitution, Network Externalities and Irreversibility, In J. Dean, D. Salvatore, & T. Willett (Eds.), The Dollarization Debate, Oxford University Press.

Feige, E. L. & Urban, I. (2003). Estimating the Size and Growth of Unrecorded Economic Activity in Transition Countries: A Re-evaluation of Electric Consumption Method Estimates and their Implications, William Davidson Institute Working paper Number 636. http://www.bus.umich.edu/KresgeLibrary/Collections/Workingpapers/wdi/wp636.pdf

Feige, E. L. & Urban, I. (2008). Measuring underground (unobserved, non-observed, unrecorded) economies in transition countries: Can we trust GDP? Journal of Comparative Economics 36(2), 287-306.

Feige, E. L. (2012a). New Estimates of U.S. Currency Abroad, the Domestic Money Supply and the Unreported Economy, Crime, Law and Social Change, 57 (3), 239-263.

Feige, E. L. (2012b). The Myth of the “Cashless Society”: How Much of America’s Currency is Overseas?”in: The Usage, Costs and Benefits of Cash: Theory and Evidence from Macro and Micro Data; Deutshe Bundesbank Eurosystem, 119-151.

Feld, L. & Schneider, F. (2010). Survey on the shadow economy and undeclared earnings in the OECD countries, German Economic Review, 11(2), 109-149.

Feldbrugge, F. J. (1989). The Soviet second economy in a political and legal perspective, In E. L. Feige (Ed.), The Underground Economies: Tax evasion and information distortion, New York, Cambridge University Press, 297-338.

Feldman, N.E. & Slemrod, J. (2007). Estimating tax noncompliance with evidence from unaudited tax returns, The Economic Journal 117, 327-352

Frey, B. S. & Weck-Hannemann, H. (1984). The Hidden Economy as an ‘Unobserved’ Variable, European Economic Review 26(1-2), 33-53.

Friedman, E., Johnson, S., Kaufmann, D. & Zoido-Lobaton P. (2000). Dodging the grabbing hand: the determinants of unofficial activity in 69 countries, Journal of Public Economics, 76 (3), 459-493.

Gemmell, N. & Hasseldine J. (2012). The Tax Gap: A Methodological Review, Advances in Taxation, 20, 203-231.

Giles, D. (1999). Modeling the Hidden Economy and the Tax Gap in New Zealand, Empirical Economics 24,621-640.

Giles, D. & Tedds, L. (2002). Taxes and the Canadian Underground Economy, Canadian Tax Foundation, Toronto.

Grossman, G. (1977). The Second Economy in the USSR, Problems of Communism, 26 (5), 25-40.

Gutmann, P, (1977). The Subterranean Economy, Financial Analyst Journal, 34(1), 24-27.

Gyomai, G & van den Ven, P. (2014). The Non-observed Economy in the System of National Accounts, OECD Statistics Brief, 18, 1-12.

Helberger, C. & Knepel, H. (1988). How big is the shadow economy? A re-analysis of the unobserved-variable approach of B.S. Frey and H. Weck-Hannemann, European Economic Journal 32, 965-76.

Herwartz, H., Schneider F. & Tafenau E. (2015). One share fits all? Regional variations in the extent of the shadow economy in Europe, Regional Studies, 49, 1575-1587.

Hill, R. (2002). The Underground Economy in Canada: Boom or Bust? Canadian Tax Journal, 50(5), 1641-1654.

HM Revenue and Customs, (2014a). Measuring tax gaps 2014 edition: Tax Gap estimates for 2012-13, October 1-79.

HM Revenue and Customs, (2014b). Measuring tax gaps 2014 edition, Methodological annex, 1-62.

IRS, Internal Revenue Service, (1979). Estimates of Income Unreported on Individual Tax Returns, U.S. Department of the Treasury.1109 (9-79).

IRS, Internal Revenue Service, (1983). Income Tax Compliance Research 1983, Estimates for 1973-1981, U.S. Department of the Treasury, Washington, D.C.

IRS, Internal Revenue Service, (2005a). New IRS Study Provides Preliminary Tax Gap Measure, IR-2005-38, March 29. U.S. Department of the Treasury, Washington, D.C.

IRS, Internal Revenue Service, (2005b). Tax Gap Facts and Figures. U.S. Department of the Treasury, Washington, D.C.

IRS, Internal Revenue Service, (2005c). Understanding the Tax Gap. FS-2005-14, U.S. Department of the Treasury, Washington, D.C.

IRS, Internal Revenue Service, (2006). Updated Estimates of the TY 2001 Individual Income Tax Underreporting Gap. Overview, Office of Research, Analysis, and Statistics, U.S. Department of the Treasury, Washington, D.C.

IRS, Internal Revenue Service (2011). Recent Research on Tax Administration and Compliance, IRS Research Bulletin, https://www.irs.gov/pub/irs-soi/11rescon.pdf

IRS, Internal Revenue Service, (2012). Tax Year 2006 Tax Gap estimate – Summary of Estimation Methods. http://www.irs.gov/pub/irs-soi/06rastg12methods.pdf

IMF, International Monetary Fund, Fiscal Affairs Department, (2013). United Kingdom Assessment of HMRC’s Tax Gap Analysis, IMF Country Report No. 13/314.

IMF, International Monetary Fund, (2014). Republic of Estonia Technical Assistance Report-Revenue Administration Gap analysis Program –The Value Added Tax Gap, Country Report No.14/13, May.

Johnson, S., Kaufmann, D. & Schleifer, A., (1997). The unofficial economy in transition, Brookings Papers on Economic Activity 2, 159–239.

Johnson, S., Kaufmann, D. & Zoido-Lobaton, P., (1998). Regulatory discretion and the unofficial economy, American Economic Review, 88 (2), 387–392.

Kaufmann, D. & Kaliberda, A. (1996). Integrating the Unofficial Economy into the Dynamics of Post –Socialist Economies, World Bank Policy Research Working Paper, No. 1691 Washington D.C.

Khomenko, T. (2007). Measurement of the non-observed economy in transition economies with special reference to the CIS countries, International Conference organized by the International Association fro Research in Income and Wealth (IARIW) and the National Bureau of Statistics (NBS) of China, September 18-21, 2007.

Kireenko, A. & Nevzorova, E. (2015). Impact of Shadow Economy on Quality of Life: Indicators and Model Selection, Procedia Economics and Finance 25, 559-568.

Kudabaev, Z. (2004). Estimation of non-observed economy in Kyrgyzstan, OECD/ESCAP/ADB Workshop on Assessing and Improving Statistical Quality: Measuring the Non-observed Economy, Bangkok, 1-6.

Ledbetter, M. (2007). Comparison of BEA Estimates of Personal Income and IRS Estimates of Adjusted Gross Income New Estimates for 2005, Revised Estimates for 2004, Survey of Current Business November, 35-40.

Leitzel, J. (1997). Rule Evasion in Transitional Russia, In , J. M. Nelson, , C. Tilly & L. Walker, (Eds.), Transforming Post-Communist Political Economies, (pp. 118-130). Washington D.C., National Academy Press.

Leamer, E. (1983). Let’s Take the Con out of Econometrics, The American Economic Review, 73(1), 31-43.

Loayza, N. A. (1997). The Economics of the Informal Sector. A simple model and empirical evidence from Latin America, World Bank Policy Research Working Paper 1727, Washington D.C.

Manski, C.F. (2015). Communication Uncertainty in Official Economic Statistics: An Appraisal Fifty Years after Morgenstern, Journal of Economic Literature, 53(3), 631–653.

Milgram, S. (1963). Behavioral Study of Obedience, Journal of Abnormal and Social Psychology, 67(4), 371-378.

Mosakova, I. (2001). Estimation of Non-Observed Economy: The Statistical Practices in Russia, October. http://www.oecd.org/searchResult/0,2665,en_2649_37445_1_1_1_1_37445,00.html

Murphy, R. (2012). Closing the European Tax Gap: A Report for Group of the progressive Alliance of Socialists & Democrats in the European Parliament, Tax Research LLP. http://www.socialistsanddemocrats.eu/publications/closing-european-tax-gap-report-group-progressive-alliance-socialists-democrats

OECD, Organization for Economic Co-operation and Development, (2002). Measuring the Non-Observed Economy: A Handbook, OECD Publications Service, Paris, France. 1-249.

Office for National Statistics, (2014). National Accounts Articles-Impact of ESE95 Changes on Current Price GDP Estimates, May, 29. www.ons.gov.uk/ons/dcp171766_365274.pdf

Parker, R. (1984). Improved adjustments for Misreporting of Tax return Information used to estimate the National Income and Product Accounts, Survey of Current Business, June, 17-25.

Pissarides, C. A. & Weber, G. (1989). An expenditure-based estimate of Britain’s black economy, Journal of Public Economics, 39(1), 17-32.

Putniņš, T.J., and A. Sauka, (2015). Measuring the shadow economy using company managers, Journal of Comparative Economics 43(2), 471-490.

Reckon, LLP. (2009). Study to Quantify and Analyze the VAT Gap in the EU-25 Member States, London.

Rogoznikova, T. (2004). Experience of Uzbekistan in Measuring the Non-observed Economy, NOE, Issues of measurement Conference, St. Petersburg. (Russian)

Salahodjaev, R. (2015). Intelligence and Shadow Economy: a Cross-Country Empirical Assessment, Intelligence 49, 129-133.

Sandmo, A. (2012). An evasive topic: theorizing about the hidden economy, International Tax and Public Finance, 19, 5-24.

Schneider, F. (2005). Shadow economies around the world: what do we really know? European Journal of Political Economy 21, 598-642.

Schneider, F. (2007). Shadow Economies and Corruption All Over the World: New Estimates for 145 Countries” Economics E Journal, 2007-9.

Schneider, F. (2009). Size and Development of the Shadow Economy in Germany, Austria and Other OECD-Countries, Revue économique, 60(5) ,1079-1116.

Schneider, F. (2010). The Influence of Public Institutions on the Shadow Economy: An Empirical Investigation for OECD Countries, Review of Law and Economics 6(3), 441-468.

Schneider, F. (2011). The Shadow Economy Labour Force: What do we (not) know? World Economics 12(4), 53-92.

Schneider, F. (2012). The Shadow Economy and Tax Evasion: What Do We (Not) Know? Tax Evasion in Europe, Focus, CESifo Forum, 3-12.

Schneider, F. (2014). Work in the shadow: Micro and Marco results, International Economic Journal 28(3), 365-379. Schneider, F. & Bajada, C. (2005). An International Comparison of Underground Economic Activity, in Bajada, C. & Schneider, F. (eds.) Size, Causes and Consequences of the Underground Economy: An International Perspective, Ashgate Publishing Limited, Aldershot. England

Schneider, F. & Buehn, A. (2009). Shadow Economies and Corruption All Over the World: Revised Estimates for 120 Countries” Economics E Journal, Version 2 October 27, 2009.

Schneider, F., Buehn, A. & Montenegro, C.E. (2010a). Shadow Economies All over the World: New Estimates for 162 Countries from 1999 to 2007, The World Bank, Policy Research Working Paper 5356, 1-53.

Schneider, F., Buehn, A. & Montenegro,C.E. (2010b). Shadow Economies All over the World: New Estimates for 162 Countries from 1999 to 2007, (Revised Version), The World Bank, Policy Research Working Paper 5356, 1-53.

Schneider, F., Buehn, A. & Montenegro,C.E. (2010c). New Estimates from the Shadow Economies all over the World, International Economic Journal, 24(4), 443-461.

Schneider, F., Buehn, A. & Montenegro,C.E. (2011). Shadow Economies All Over the World: New Estimates for 162 Countries from 1999 to 2007 in Schneider, F. (ed) Handbook on the Shadow Economy, Edward Elgar Cheltenham, UK.

Schneider, F. & Enste, D. (2000a). Shadow Economies Around the World: Size Causes and Consequences. IMF Working Paper WP/00/26, 1- 56.

Schneider, F. & Enste, D. (2000b). Shadow Economies: Size, Causes, and Consequences, Journal of Economic Literature, XXXVIII, 77-114.

Schneider, F. & Enste, D. (2002). Hiding in the Shadows: The Growth of the Underground Economy, International Monetary Fund, Economic Issues 30.

Schneider, F. & Enste, D. (2013). The Shadow Economy: An International Survey, Second Edition, Cambridge University Press, New York.

Schneider, F., Linsbauer, K. & Heinemann, F. (2015). Religion and the Shadow Economy, Kyklos, 68(1), 111-141.

Schneider, F. & Neck, R. (1993). The development of the shadow economy under changing tax systems and structures: Some theoretical and empirical results for Austria, Finanzarchiv 50(3), 344-69.

Schneider, F. Raczkowski, K. & Mróz (2015). Shadow economy and tax evasion in the EU, Journal of Money Laundering Control, 18 (1), 34-51.

Schneider, F. & Williams, C. (2013). The Shadow Economy, Institute of Economic Affairs, London.

Slemrod, J. (1990). Optimal Taxation and Optimal Tax Systems, Journal of Economic Perspectives, 4(1), 157-178.

Slemrod, J. (2004). Small Business and the Tax System, in H. Aaron & J. Slemrod (eds.) The Crisis in Tax Administration, (pp. 69-101). Brookings Institution Press.

Slemrod, J. (2007). Cheating Ourselves: The Economics of Tax Evasion, Journal of Economic Perspectives 21 (1), 25–48.

Slemrod, J. & Weber, C. (2012). Evidence of the Invisible: Toward a Credibility Revolution in the Empirical Analysis of Tax Evasion and the Informal Economy” International Tax and Public Finance, 19(1), 25-53.

Smith, R. S. (2002). The Underground Economy: Guidance for Policy Makers? Canadian Tax Journal, 50(5), 1655-1661.

Strümpel, B. (1966). Steuermoral und Steuerwiderstand der deutschen Selbständigen, Cologne/Opladen, Westdeutscher Verlag.

Suslov, N. & Ageeva, S. (2009). Influence of energy prices on the size of shadow economy: A cross-country analysis. EERC Working Paper Series 09/05e, EERC Research Network, Russia and CIS.

Tafenau, E., Herwartz, H. & Schneider, F. (2010). Regional Estimates of the shadow economy in Europe, International Economic Journal, 24(4), 629-636.

Tanzi, V. (1983). The Underground Economy in the United States: Annual Estimates, 1930-80, International Monetary Fund Staff Papers 30, 283-305.

Tedds L.M. & Giles, D. E.A. (2005). Response to Breusch’s Critique, Canadian Tax Journal 53(2), 392-395.

Teobaldelli, D. & Schneider, F. (2013). The influence of direct democracy on the shadow economy, Public choice 157: 543-567.

Thaler, R. H. & Sunstein, C.R. (2008). Nudge: Improving decisions about health, wealth and happiness. Yale University Press, New Haven CT.

The Economist. (2015). Sex Drugs and GDP, The Economist, May 31, 2014. http://www.economist.com/news/finance-and-economics/21603073-italys-inclusion-illicit-activities-its-figures-excites-much-interest-sex

Thomas, J. J. (1992). Informal Economic Activity. Ann Arbor, The University of Michigan Press.

Torgler, B. &Schneider, F. (2009). The Impact of tax morale and institutional quality on the shadow economy, Journal of Economic Psychology, 30, 228-245.

Torgler, B., Schneider, F. & Schaltegger, C. (2010). Local autonomy, tax morale and the shadow Economy, Public Choice 144(1), 293-321.

Torgler, B., Schneider, F. & Macintyre, A. (2011). Shadow economy, voice and accountability and corruption, In Friedrich Schneider (Ed.) Handbook on the Shadow Economy, Edward Elgar Cheltenham, UK.

UN, United Nations Economic Commission for Europe. (2003). Non-Observed Economy in national Accounts: Survey of National Practices, Geneva, 1-257.

UN, United Nations Economic Commission for Europe. (2008). Non-Observed Economy in national Accounts: Survey of Country Practices, Geneva, 1-340.

van deVen, P. (2015). New standards for compiling national accounts: what’s the impact on GDP and other macro-economic indicators? OECD Statistics Brief, February No. 20. https://www.google.com/?gws_rd=ssl#q=OECD+Statistics+Brief.++2015.++“New+standards+for+compiling+national+accounts:+what’s+the+impact+on+GDP

Yitzhaki, S. (1974). A note on income tax evasion: A theoretical analysis. Journal of Public Economics, 3, 201–202.