Cover IMF Working Papers
The Underground Economy: Estimation, and Economic and Policy Implications: The Case of Pakistan
Author: Mr. Ghiath Shabsigh
Series:
IMF Working Papers
Volume/Issue:
Volume 1995: Issue 101
Language:
English
Publication Date:
01 Oct 1995
DOI:
https://doi.org/10.5089/9781451852479.001
ISBN:
9781451852479
ISSN:
1018-5941
Pages:
23
Keywords:
WP; GDP deflator; deficit-UE cycle; integration equation; formal GDP; D ratio; import UEA; currency demand; causality equation; Private investment; Budget planning and preparation; Currencies; Income; Government debt management
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IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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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.
Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund