Flexibility and Reliability when Measuring the Informal Economy
DOI:
https://doi.org/10.29076/issn.2528-7737vol18iss47.2025pp1-17pKeywords:
informal economy, measurement, estimation, methodology, review.Abstract
Informal economy can have ambiguous consequences on economic growth and the morality of a given society, among others, differing significantly in size over time and across different territories. Against this background, quantifying shadow economy is a necessary but complicated task that relies on mensuration procedures such as survey data models, questionnaires, and econometric approaches. The present article aims to review the basic assumptions and main features of the current informal sector assessment methodology, exploring the potential inaccuracy issues inherent to flexible methods and the inflexibility concerns present in more reliable processes. While the “General Equilibrium” approaches embody the most plausible and promising attempts to reconcile flexibility and reliability properties, this document will try to elucidate whether a reasonable balance is accomplishable under the methodologies available nowadays
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