IMF Working Papers

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

By Ghiath Shabsigh

October 1, 1995

Preview Citation

Format: Chicago

Ghiath Shabsigh. The Underground Economy: Estimation, and Economic and Policy Implications: The Case of Pakistan, (USA: International Monetary Fund, 1995) accessed December 26, 2024
Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

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.

Subject: Budget planning and preparation, Currencies, Government debt management, Income, Money, National accounts, Private investment, Public financial management (PFM)

Keywords: Budget planning and preparation, Causality equation, Currencies, Currency demand, D ratio, Deficit-UE cycle, Formal GDP, GDP deflator, Government debt management, Import UEA, Income, Integration equation, Private investment, WP

Publication Details

  • Pages:

    23

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 1995/101

  • Stock No:

    WPIEA1011995

  • ISBN:

    9781451852479

  • ISSN:

    1018-5941

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