The Underground Economy: Estimation, and Economic and Policy Implications: The Case of Pakistan

23 Pages Posted: 15 Feb 2006

See all articles by Ghiath Shabsigh

Ghiath Shabsigh

International Monetary Fund (IMF) - Middle East and Central Asia Department

Date Written: October 1995

Abstract

This paper estimates the size of the underground economy in Pakistan and analyzes its impact on Government fiscal position and the allocation of economic resources in the national economy. The results suggest that there is a mutual dependency between the size of the underground economy and fiscal deficits, and show a leakage from the national income-expenditure cycle in the formal economy to the underground economy via private investments. Finally, the paper proposes long- and short-run policies to reduce the size of the underground economy.

JEL Classification: A10, E20, E62, O17, O53

Suggested Citation

Shabsigh, Ghiath, The Underground Economy: Estimation, and Economic and Policy Implications: The Case of Pakistan (October 1995). Available at SSRN: https://ssrn.com/abstract=883248 or http://dx.doi.org/10.2139/ssrn.883248

Ghiath Shabsigh (Contact Author)

International Monetary Fund (IMF) - Middle East and Central Asia Department ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

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