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- Title
The Non‐Observed Economy in Portugal: The monetary model and the MIMIC model.
- Authors
Soares, Cláudia; Afonso, Óscar
- Abstract
This paper offers estimations for the Portuguese path of the Non‐Observed Economy (NOE), in the period 1970–2015, through two seminal approaches: monetary method and the Multiple Indicators Multiple Causes (MIMIC) model. It is observed that the tax burden and social benefits are its main causes. Then, to get a more in‐depth understanding of the phenomenon, it provides a study of the Granger causality between the NOE and the official Gross Domestic Product (GDP), emphasizing the implications of the NOE on the Portuguese economy. Evidence has been found for the existence of bidirectional causality between the NOE and the GDP, suggesting that the formal economy affects the NOE, and conversely that the NOE affects the economic growth.
- Subjects
PORTUGUESE economy; GROSS domestic product; ECONOMIC development; ECONOMIC indicators; ECONOMIC policy
- Publication
Metroeconomica, 2019, Vol 70, Issue 1, p172
- ISSN
0026-1386
- Publication type
Article
- DOI
10.1111/meca.12235