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someone please explain me the currency demand approach measuring the shadow economy?

following the literature peope estimate an econometric equation in order to measure the size of the shaodow economy, but whats the point of this equation and where do i see the size of the shadow economy, please help !
thanks

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One Response to “someone please explain me the currency demand approach measuring the shadow economy?”

  1. ronald.glass@sbcglobal.net Says:
    August 28th, 2009 at 12:33 pm

    I guess you are referring to the cash economy where people pay workers for goods or services with cash and avoid employment and all other taxes. Kind of like a black market economy to avoid taxes. No checks or other means to track the transactions. It is like dope dealers where they don’t take cash or credit cards. This also requires money laundering systems when done on a big scale . I don’t know what math formula is used to estimate this shadow economy but my guess is that it was developed by the internal Revenue Service.

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