Abstract:

This work provides an opportunity to analyze the relationship between the informal economy and economic growth, the methodology used is inspired by the work of Friedrich schneider (2018). To this end, we empirically address this point using an econometric model over the period 1996-2015. From the model prediction, we find the existence of a negative causal effect of the Shadow economy on economic growth. Our results state that the simultaneous effect of the Shadow economy and the rule of law variables and regulatory quality are negative. The size of the informal sector depends positively on tax law indicators and government policies and regulations, and an increase in the size of the informal sector is detrimental to growth.

Keywords:

Economy, growth, informal trade.

How to Cite:

Hedhli Mayssa, Arafet Hamida, Zouhaier Hadhek, Fatma Mrad and Mosbah Lafi. Shadow Economy and Economic Growth. [ref]: vol.19.2021. available at: https://refpress.org/ref-vol19-a25/