The monetary method to measure the shadow economy: The forgotten problem of the initial conditions

Journal article: We show that when the money demand function used to estimate the size of the shadow economy includes the lagged dependent variable, the need to assume a known initial condition reappears as it was the case in the early monetary methods.

Author(s)

Hildegart Ahumada, Facundo Alvaredo, Alfredo Canavese

Journal
  • Economics Letters
Date of publication
  • 2008
Keywords JEL
E26 H3 K4 O17
Keywords
  • Underground economy
  • Informality
  • Monetary method
Pages
  • 97-99
Version
  • 1
Volume
  • 101