Abstract
During the last few years, growing concern about the phenomenon of the shadow (or hidden) economy has arisen; as a consequence, the shadow economy has received increasing attention by the public, politicians, and social scientists.1 For industrial countries, there are at least two reasons why politicians have become concerned about the growth and size of the shadow economy:
-
(1)
If an increase in the size of the shadow economy is mainly caused by a rising tax burden, any increase in tax rates may lead to a further shift from official to inofficial activities and, hence, to a further decrease in tax revenues.
-
(2)
If — due to the existence of the shadow economy — some individuals have a second source of income and spend at least part of this income in the “official” economy, any change in the size of the shadow economy directly affects the development of the official economy.
We are indebted to the participants of the Vienna conference on the political economy of progressive taxation, and particularly to D. Bos, J. Brunner and J. Falkinger for helpful discussions. Remaining errors and shortcomings are our responsibility.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Preview
Unable to display preview. Download preview PDF.
References
Alm, J. (1985): “The Welfare Cost of the Underground Economy.” Economic Inquiry 26: 243–263.
Almon, C., Buckler, M. B., Horwitz, L.M., and Eeimbold, Th. C. (1974): Interindustry Forecasts of the American Economy. Lexington, Mass.: D.C. Heath and Company.
Boeschoten, W.C., and Fage, M.M.G. (1984): The Volume of Payments and the Informal Economy in the Netherlands1965–1982. Dordrecht: M. Nijhoff Publishers.
Breuss, F. (1982): “Potential Output und gesamtwirtschaftliche Kapazitätsauslastung.” WIFO-Monatsberichte 55: 104–118.
Breuss, F. (1983): Österreichs Außenwirtschaft 1945–1982. Institut für Angewandte Sozialforschung. Vienna: Signum-Verlag.
Cagan, P. (1958): “The Demand for Currency Relative to the Total Money Supply.” Journal of Political Economy 66: 302–328.
Coen, R.M., and Hickman, B.G. (1970): “Constrained Joint Estimation of Factor Demand and Production Functions.” Review of Economics and Statistics 52: 280–300.
Franz, A. (1985): “Estimates of the Hidden Economy in Austria on the Basis of Official Statistics.” Review of Income and Wealth 36: 325–336.
Frey, B.S. (1984): “Schattenwirtschaft und Wirtschaftspolitik.” Kredit und Kapital: 102–119.
Frey, B.S., and Pommereime, W.W. (1984): “The Hidden Economy: State and Prospects for Measurement.” Review of Income and Wealth 30: 1–21.
Frey, B.S., and Weck-Hannemann, H. (1984): “The Hidden Economy as an ‘Unobserved’ Variable.” European Economic Review 26: 33–53.
Gaertner, W., and Wenig, A. (eds.) (1985): The Economics of the Shadow Economy. Heidelberg: Springer-Verlag.
Garcia, G., and Pak, S. (1979): “The Ratio of Currency to Demand Deposits in the United States.” Journal of Finance 34: 703–715.
Gutman, P.M. (1979): “Statistical Illusions, Mistaken Policies.” Challenge 22: 21–38.
Hofreither, M.F. (1988): “Modelling the Austrian Economy: A Conventional Approach.” Discussion Paper8802. Linz: University of Linz, Department of Economics.
Hofreither, M.F., and Schneider, F. (1987): “Die Erfassung der Schattenwirtschaft durch den Bargeldansatz - plausible Ergebnisse mittels unzulässiger Methode?” Wirtschaftspolitische Blätter 34: 99–118.
Isachsen, A.J., and Strom, S. (1985): “The Size and Growth of the Hidden Economy in Norway.” Review of Income and Wealth 31: 21–38.
Kirchgässner, G. (1983): “Size and Development of the West German Shadow Economy, 1955–1980.” Zeitschrift für die gesamte Staatswissenschaft 139: 197–214.
Kirchgässner, G. (1984): “Verfahren zur Erfassung des in der Schattenwirtschaft erarbeiteten Sozialprodukts.” Allgemeines Statistisches Archiv 68: 378–405.
Kirchgässner, G., and Pommerehne, W.W. (1985): “Schattenwirtschaft: Eine Herausforderung für die Wirtschafts- und Finanzpolitik.” Quartalshefte der Girozentrale Wien 20: 165–177.
Klein, R.L. (1983): Lectures in Econometrics, Advanced Textbooks in Economics. Amsterdam: North-Holland.
Klovland, J. (1984): “Tax Evasion and the Demand for Currency in Norway and Sweden. Is there a Hidden Relationship?” Scandinavian Journal of Economics 86: 423–439.
Mooslechner, P. (1985): “Der monetäre Ansatz zur Schattenwirtschaft — Eine empirische Illustration an Hand österreichischer Daten.” In Die andere Wirtschaft. Schwarzarbeit und Do-It-Yourself in Osterreich, edited by J. Skolka. Vienna: 101–119.
Peacock, A., and Shaw, G.K. (1982): “Tax Evasion and Tax Revenue Loss.” Public Finance 37: 269–278.
Pindyck, R.S., and Rubinfeld, D.L. (1981): Econometric Models and Economic Forecasts. New York: McGraw Hill, 2nd edition.
Pommerehne, W.W. (1986): “Was wissen wir eigentlich über Steuerhinterziehung?” Rivista Internazionale di Science Economiche e Commerciali 35: 230–262.
Schebeck, F., and Thury, G. (1976): “Gesamtwirtschaftliche Auslastungsmaße.” Empirica 3: 219–239.
Schneider, F. (1986): “Estimating the Size of the Danish Shadow Economy Using the Currency Demand Approach: An Attempt.” Scandinavian Journal of Economics 88: 643–668.
Schneider, F., and Hofreither, M.F. (1987): “Measuring the Size of the Shadow Economy.” Economic Affairs 7: 18–23.
Schneider, F., and Pommerehne, W.W. (1985): “The Decline of Productivity Growth and the Rise of the Shadow Economy in the U.S.” Working Paper. Aarhus: University of Aarhus.
Skolka, J. (1985): Die andere Wirtschaft. Schwarzarbeit und Do-It-Yourself in Osterreich. Vienna.
Tanzi, V. (1980): “The Underground Economy in the United States: Estimates and Implications.” Banca Nazionale del Lavoro Quarterly Journal 135: 427–453.
Tanzi, V. (1983): “The Underground Economy in the United States: Annual Estimates, 1930–1980.” IMF-Staff Papers 30: 283–305.
Weck, H., Pommerehne, W.W., and Frey, B.S. (1984): Schattenwirtschaft. München: Franz Vahlen-Verlag.
Wörgötter, A. (1977): “Lohn- und Preissysteme für Österreich.” Empirica 4: 127–140.
Author information
Authors and Affiliations
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 1989 Springer-Verlag Berlin Heidelberg
About this paper
Cite this paper
Schneider, F., Hofreither, M.F., Neck, R. (1989). The Consequences of a Changing Shadow Economy for the “Official” Economy: Some Empirical Results for Austria. In: Bös, D., Felderer, B. (eds) The Political Economy of Progressive Taxation. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-74999-5_14
Download citation
DOI: https://doi.org/10.1007/978-3-642-74999-5_14
Publisher Name: Springer, Berlin, Heidelberg
Print ISBN: 978-3-642-75001-4
Online ISBN: 978-3-642-74999-5
eBook Packages: Springer Book Archive