engleski

How to measure the unmeasurable: Project Grey developing capacities and capabilities for tackling undeclared work

The term not directly observed or the underground economy refers to those economic activities that should be included in the GDP estimation but which are not recorded in the statistics business surveys or tax and administrative data used in the calculation of the estimates of national accounts because they are not directly observable. The unofficial or informal economy contains that part of the economic activity that is difficult to measure. Thus, next to the complex nature how to define the underground production, there is even more demanding task how to measure it. Hitherto in the literature, various estimation methods of unofficial economy have been proposed and their results differ significantly. The goal of this article is to provide an overview on the various methods of its measurement. The unobserved economy poses estimation problems of economic aggregates that can be divided in total lack of information and distortion of available information. There is no universal optimal approach capable of being applied to all countries or even to the same country at different periods. In the limitation of the underground economy, it is much better to obviate the causes than penalise the consequences. It is necessary to simplify the procedures for citizens’ formalizing their undeclared activities, to insure a tax system that is stable as possible and a tax and regulatory burden as low as possible. Crucial is the improvement of institutions, professionalization of civil service and remove the huge impact of politics in the societies.

Causal methods ; direct methods ; Eurostat approach ; indirect methods ; measurement of underground economy ; economic policy

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