measuring the hidden economy implications for econometric modelling in this paper i support using econometric techniques to measure the size of the hidden underground economy because such information is important for the construction of certain economic models and for empirical policy analysis generally detailed information on the output of the hidden economy is unavailable even where careful measures of the underground economy have been constructed usually these data are available only periodically important exceptions are the classic results of tanzi 1983 for the united states and bhattacharyya s 1990 series for the united kingdom in the case of the new zealand economy a time series of data on the hidden economy has been generated recently giles 1997a this provides the unusual opportunity to undertake econometric modelling in a way which takes account of such activity formally moreover we can examine the policy implications arising from the linkages between hidden output and various measured economic aggregates this abstract was borrowed from another version of this item

did the commodity price spike increase rural poverty evidence from a long run panel in bangladesh we assess the effects of the dramatic rise in agricultural commodity prices during 2007 2008 on income dynamics and poverty among rural households in bangladesh a unique panel data set allows us to put the effects of recent events in the context of long run trends in income and poverty we use data from a nationally representative longitudinal survey of rural households in bangladesh collected in four waves in 1988 2000 2004 and 2008 nargis and hossain nargis n hossain m 2006 income dynamics and pathways out of rural poverty in bangladesh 1988 2004 agric econ 35 425 435 analysed income dynamics and poverty incidence for the first three waves finding a declining trend in both the incidence and severity of poverty aided in particular by human capital development and off farm employment opportunities we update and extend the analysis to include data collected in 2008 at the height of a spike in agricultural prices we find that the price of a balanced food basket increased by more than 50 during 2000 2008 while household income rose only 15 as a result the incidence and severity of rural poverty in bangladesh sunk to pre 2000 levels during 2004 2008 thus the price spikes in 2007 2008 helped push an additional 13 million people into poverty in rural bangladesh moreover we find that the determinants of poverty have not been time invariant in particular agricultural production which had previously been associated with a higher incidence of poverty served as a hedge against higher food prices during 2004 2008

estimating the size of the shadow economy in spain a structural model with latent variables there has recently been a revival of international interest in measuring the size of the shadow economy the current study adopts an approach to the spanish case that is based on the theory of unobservable variables this methodology involves the estimation of structural models mimic which analyses a set of causes of the shadow economy while simultaneously taking into account its influence upon a series of indicators the proposed model permits the determination of a relative evolution over time of the size of the shadow economy which requires the calibration of the model with an exogenous estimation in order to obtain real values the exogenous estimation employed is that obtained by a monetary method based on a money demand function the results show a considerable shadow economy measuring between 8 and 18 8 of gdp in the period 1976 2002 and demonstrate that the shadow economy is significantly influenced by the tax burden the degree of regulation and unit labour costs a positive correlation is

unemployment and international shadow economy gender differences abstractadding to the body of research on cross country determinants of the informal economy this article studies how unemployment differences across gender drive the propensities to work in the informal sector results accounting for possible simultaneity between unemployment and the shadow economy show that unemployed males rather than unemployed females were more likely to operate underground these findings about greater male propensities are generally robust to alternative considerations

electoral rules and environmental policy abstract this paper investigates the effect of electoral rules on environmental policymaking using several estimators from the program evaluation literature we find that governments set stricter environmental policies under proportional as opposed to majoritarian systems

shadow economy and unemployment rate in u s a is there a structural relationship an empirical analysis this article aims to estimate the size of the us shadow economy se using a structural equation approach and to evaluate if a structural relationship exists between the se and the unemployment rate ur in the united states the size of the se is estimated to be decreasing over the last two decades we corroborate the existence of a structural relationship between the se and the ur by using a simple theoretical model furthermore we extend the okun s law to estimate the structural relationship between growth rate of official gdp se and ur our results indicate a significant positive relationship between the se and the ur

tax evasion and the demand for currency in norway and sweden is there a hidden relationship variables associated with the level of hidden economic activity are examined in terms of their effects on the demand for currency in norway and sweden aggregate time series of marginal tax rates are compiled for this purpose no such effects are evident for norway while in the case of sweden the demand for currency was found to be significantly related to marginal tax rates these estimates are then used as a basis for deriving an estimate of the size of the hidden economy in sweden an analysis of the assumptions underlying this procedure shows that the uncertainty involved in applying the currency approach to measuring the size of the hidden economy is so great as to make it hazardous to rely on such estimates

does trade openness improve environmental quality the literature on trade openness economic development and the environment is largely inconclusive about the environmental consequences of trade this study treats trade and income as endogenous and estimates the overall impact of trade openness on environmental quality using the instrumental variables technique we find that whether or not trade has a beneficial effect on the environment varies depending on the pollutant and the country trade is found to benefit the environment in oecd countries it has detrimental effects however on sulfur dioxide so2 and carbon dioxide co2 emissions in non oecd countries although it does lower biochemical oxygen demand bod emissions in these countries we also find the impact is large in the long term after the dynamic adjustment process although it is small in the short term

what is the role of openness for china s aggregate industrial so2 emission a structural analysis based on the divisia decomposition method abstract having observed the weaknesses in previous structural analyses on the role of environmental kuznets curve ekc the author proposes a detailed analysis using a rich data set of provincial level production and so2 emission intensity of 13 industrial sectors the latter represent more than 98 of the total industrial production in each chinese province for the period 1991 2001 through the use of the log mean divisia index decomposition method the variations in province level industrial so2 emissions with regard to the 1990 baseline level are decomposed into the contribution from three components scale composition and technical effects the following analysis seeks to explain how trade openness affects aggregate industrial so2 emission through its impact on the structural determinants for these three components of region specific environmental variations

shadow economies size causes and consequences using various methods the size of the shadow economy in 76 developing transition and oecd countries is estimated average size varies from 12 percent of gdp for oecd countries to 23 percent for transition countries and 39 percent for developing countries increasing taxation and social security contributions combined with rising state regulations are driving forces for the increase of the shadow economy especially in oecd countries according to some findings corruption has a positive impact on the size of the shadow economy and a growing shadow economy has a negative effect on official gdp growth

unemployment and the shadow economy abstractcurrent research links the shadow economy se and the unemployment rate either indirectly or by means of a preliminary estimate this article establishes and empirically implements a methodology for estimating the size of the se as a direct function of the tax and unemployment rates this link is found to be extremely relevant in countries with high unemployment rates such as greece and spain and less relevant in countries with moderate unemployment rates such as germany and italy unemployment s contribution to the se is shown to be significant especially in the years following the economic downturn of 2008 the calculation of the variance and distribution of these estimates is another significant contribution the common criticism that se estimates are unreliable is addressed by calculating the variance and the distribution of the estimates and the large size of the se in greece and spain is once again confirmed

size and scope of the underground economy in germany the objective of this paper is to improve estimations of the size and scope of the underground economy by introducing a new approach that combines the advantages of the two most commonly used approaches i e currency demand and multiple indicators multiple causes mimic the new approach is applied to germany among other things it is shown that the approach yields improved estimation results some policy perspectives are discussed in the concluding section

how does foreign direct investment affect pollution toward a better understanding of the direct and conditional effects this paper seeks to investigate the impact of foreign direct investments fdis on industrial pollution hbox co 2 hbox so 2 hbox no mathrm x and bod emissions on a large sample of highly heterogeneous countries by using panel data on manufacturing fdis from france germany sweden and the united kingdom between 1995 and 2008 and by developing an empirical model with first and second order interaction terms we investigate the existence and the conditionality of the most controversial fdi induced effects on industrial emissions i e pollution haven factor endowments and pollution halo hypotheses the paper has three main findings 1 the central hypotheses linking pollution to fdi are found to act simultaneously with opposing effects 2 fdis are associated with pollution reduction i e predominating pollution halo induced effect in countries with low to average capital to labour ratio but not too lax environmental regulation 3 fdis are found to increase pollution i e prevailing pollution haven and or factor endowments induced effects in countries with average capital endowments and lax environmental regulations as well as in all the capital abundant countries though with a smaller magnitude in countries having strict environmental regulations and or a high skilled labour force some specific and interesting findings are discussed regarding different fdi origin countries and fdi host country groups

air quality and economic growth an empirical study abstract in the present empirical study we have observed an inverse and sometimes u shaped relationship between environmental degradation and per capita real income as opposed to the inverted u shaped environmental kuznets curve ekc found in many earlier studies it was felt that a possible explanation of the observed pattern of relationship might be sought in the dynamics of the process of economic growth experienced by the countries concerned thus e g economic development may strengthen the market mechanism as a result of which the economy may gradually shift from non market to marketed energy resources that are less polluting this phenomenon may show up in the form of an inverse relationship as mentioned above also due to the global technical progress the production techniques available to the countries all over the world are becoming more and more capital intensive and at the same time less polluting this may mean that given the income level the pollution level decreases as the capital intensity of an economy rises in the present study it is indeed observed that as capital intensity increases the level of suspended particulate matter spm in the atmosphere decreases per capita real income is also found to be inversely related to spm partially but the interaction effect of per capita income and capital intensity on spm is observed to be positive this suggests that given the level of per capita income capital intensity a more capital intensive production technique a higher per capita income level would cause less pollution for spm a surprising result is also obtained i e a u turn is observed at a very high level of per capita real income i e us 12 500 at 1985 us prices this is possibly indicative of the fact that there are technological limits to industrial pollution control such that beyond a threshold level of income further rise in income cannot be achieved without environmental degradation

environmental regulation induced foreign direct investment the last decade has witnessed a renewed interest in the relationship between environmental regulations and international capital flows however empirical studies have so far failed to find conclusive evidence for this so called pollution haven or race to the bottom effect where foreign direct investment fdi is assumed to be attracted to low regulation countries regions or states in this paper we present a simple theoretical framework to demonstrate that greater stringency in environmental standards can lead to a strategic increase in capital inflows which we refer to as environmental regulation induced fdi our result reveals a possible explanation for the mixed results in the empirical literature and provides an illustration of the conditions under which environmental regulations in the host country can affect the location decision of foreign firms

environmental regulation and industry location in europe this paper estimates the effect of environmental regulation on industry location and compares it with other determinants of location such as agricultural education and r d country characteristics the analysis is based on a general empirical trade model that captures the interaction between country and industry characteristics in determining industry location the johnson neyman technique is used to fully explicate the nature of the conditional interactions the model is applied to data on 16 manufacturing industries from 13 european countries the empirical results indicate that the pollution haven effect is present and that the relative strength of such an effect is of about the same magnitude as other determinants of industry location a significant negative effect on industry location is observed only at relatively high levels of industry pollution intensity

pollution control and foreign direct investment in mexico an industry level analysis foreign direct investment fdi flows into developing countries have been increasing dramatically over the past decade at the same time there has been widespread concern that lax environmental standards are in part responsible for this surge this paper revisits the question of the existence of a pollution haven effect by examining the extent to which the pollution intensity of production helps explain fdi in mexico we focus on pollution intensities which are directly related to emission regulations rather than unobservable pollution taxes and allow for substitution between capital and pollution examining several different pollutants we find a positive correlation between fdi and pollution that is statistically and economically significant in the case of the highly regulated sulfur dioxide emissions industries for which the estimated relationship between fdi and pollution is positive receive up to 30 of total fdi and 30 of manufacturing output although we confirm the importance of mexico s comparative advantage in labor intensive production processes consistent with the previous literature our results suggest that environmental considerations may matter as well for firms investment decisions

the curse of the haven the impact of multinational enterprise on environmental regulation abstract we analyze the behavior of multinational enterprises in the context of resource rich and poor countries and regarding high and low income countries we depart from the pollution haven hypothesis and the resource curse the pollution haven hypothesis states that multinational enterprises move their dirty operations to countries with weak environmental regulation the resource curse holds that economic growth in countries abundant in natural resources is reduced we find that more polluting firms are relatively more often located in countries with weak environmental regulation however multinational enterprises do not have a significant impact on environmental regulation in the host country it appears that it is mainly the quality of institutions that drives both the pollution haven and the resource curse

an econometric method of estimating the hidden economy united kingdom 1960 1984 estimates and tests in this paper a method of estimating the unrecorded part of the gnp based on a modified reset procedure applied to a currency demand equation is proposed the model passes all standard diagnostic tests and the estimates of the unrecorded economy provide plausible answers when used as a proxy for the tax evaded income the method is easily applicable to most countries with minor modifications copyright 1990 by royal economic society

the lesser of two evils an empirical investigation of foreign direct investment pollution tradeoff this article investigates the relationship between foreign direct investment fdi and pollution measured by carbon dioxide co2 emissions the results suggest that while lax environmental regulations might attract fdi the foreign companies utilize less polluting technology as compared to local firms in low income countries thus fdi does not necessarily increase pollution levels in the host countries the findings therefore simultaneously support the pollution haven and the pollution halo hypotheses

the size and development of the shadow economy an empirical investigation from states of india abstract using the state level data from india this paper investigates the size of the hidden economy in indian states over the period 1974 75 to 1995 96 our analysis has shown that after liberalization of the indian economy in 1991 92 the growth in the size of the hidden economy has decreased on an average our results show that the growth in the size of the hidden economy is approximately 4 less in scheduled election years than in all other years we also demonstrate that the growth is significantly lower in those states where the coalition government is in power an increased growth of newspapers and the literacy rates translate to cleaner governance e g to fewer amounts of shadow economy activities in the economy

vertical multinationals and host country characteristics abstract we inquire into the question of what country characteristics particularly market size and labor force composition attract inward investment this approach is motivated by the empirical observation that the poorest countries attract a far smaller share of world direct investment than their share of income small markets receive less investment per capita than larger ones we develop a model that generates both stylized facts in equilibrium suggesting the existence of a development trap for small skilled labor scarce countries