UPSI Digital Repository (UDRep)
|
|
|
Abstract : Universiti Pendidikan Sultan Idris |
Improved estimates of the Malaysian Shadow Economy (SE), illegal money and corrections to the magnitude of SE using the ARDL technique based on the modified Currency Demand Function Model (CDFM) from 1972 to 2012 are provided in this paper. This study rectifies the failure in previous studies to capture the positive and symmetric relationships between the demand for money and per capita income. The use of the scale of real GDP in the Modified CDFM is necessary methodologically to obtain an accurate estimation of SE. This study combines the demand rate of deposits with circulated money as dependent variable, which is more liquid and thus may end up in SE. It considers inequality of the velocity of money in both economies (SE and the formal economy). The variables of opportunity cost of using money in their ratio level rather than logarithm form are used in the modified CDFM. The size of the SE in Malaysia has been fluctuating and averaged around 42.53% of GDP
|
References |
1. Ahiabu, S., 2006. Inflation and the underground economy. University Library of Munich, Germany, MPRA Working Paper (1706) Retrieved from: http://mpra.ub.uni-muenchen.de/1706.pdf. 2. Ahumada, H., Alvaredo, F., Canavese, A., 2007. The monetary method and the size of the shadow economy: A critical assessment. Rev. Income Wealth 53 (2), 363–371. 3. Ahumada, H., Alvaredo, F., Canavese, A., 2009. The monetary method to measure the size of the shadow economy. Rev. Econ. 60 (5), 1069–1078. 4. Akaike, H., 1979. A Bayesian extension of the minimum AIC procedure of autoregressive model fitting. Biometrica 66 (2), 237–242. 5. Alm, J., Embaye, A., 2013. Using dynamic panel methods to estimate shadow economies around the world, 1984–2006. Public Finance Rev. 41 (5), 510–543. 6. Anamaria, A.A., Ion, D., Catalin, G., 2009. Estimating the size of Romanian shadow economy using the currency demand approach. Ann. Fac. Econ. 2 (1), 623–631. 7. Asaminew, E., 2010. The Underground Economy and Tax Evasion in Ethiopia, Implications for Tax Policy. Addis Ababa, Ethiopia, EEPRI, Working Paper No.01-026). Retrieved from: https://www.researchgate.net/publication/265360935. 8. Asante, S., 2012. Estimating the underground economy and tax evasion in ghana. GRP Int. J. Bus. Econ. 1 (1), 1–9. 9. Autio, E., Fu, K., 2015. Economic and political institutions and entry into formal and informal entrepreneurship. Asia Pac. J. Manage. 32 (1), 67–94. 10. Bahamani-Oskooee, M., Hajilee, M., 2013. Exchange rate volatility and its impact on domestic investment. Res. Econ. 67 (1), 1–12. 11. Baharudin, N., Othman, M., Pah, P.W.C., Chellamuthu, D., Musa, R., 2011. Informal employment in informal sector enterprises in Malaysia. J. Dep. Stat. Malays. 2 (2011), 33–45. 12. Baharumshah, A.Z., Mohd, S.H., Masih, A.M.M., 2009. The stability of money demand in China: Evidence from the ARDL model. Econ. Syst. 33 (3), 231–244. 13. Berger, W., Pickhardt, M., Pitsoulis, A., Prinz, A., Sarda, J., 2014. The hard shadow of the greek economy: new estimates of the size of the underground economy and its fiscal impact. Appl. Econ. 46 (18), 2190–2204. 14. Buehn, A., Schneider, F., 2012. Shadow economies around the world: novel insights, accepted knowledge, and new estimates. Int. Tax Public Finance 19 (1), 139–171. 15. Cagan, P., 1958. The demand for currency relative to the total money supply. J. Political Economy 66 (4), 303–328. 16. Dabla-Norris, E., Gradstein, M., Inchauste, G., 2008. What causes firms to hide output? The determinants of informality. J. Dev. Econ. 85 (1–2), 1–27. 17. Davidescu, A.A.M., 2013. Estimating the size of Romanian shadow economy using Gutmann’s simple currency ratio approach. Theor. Appl. Econ. 20 (10), 33–48. 18. Dell’Anno, R., Davidescu, A.A., 2019. Estimating shadow economy and tax evasion in Romania. A comparison by different estimation approaches. Econ. Anal. Policy 1 (63), 130–149. 19. Dell’Anno, R., Halicioglu, F., 2010. An ARDL model of unrecorded and recorded economies in Turkey. J. Econ. Stud. 37 (6), 627–646. 20. Dickey, D.A., Fuller, W.A., 1979. Distribution of the estimators for autoregressive time series with a unit root. J. Amer. Stat. Assoc. 74 (366), 427–431. 21. Din, B.H., 2016. Estimating the determinants of shadow economy in Malaysia. Malays. J. Soc. Space 12 (5), 191–201. 22. Elgin, C., Oztunali, O., 2012. Shadow economies around the world: model based estimates. Bogazici University, Department of Economics, Working Papers (5) Retrieved from: http://ideas.econ.boun.edu.tr/RePEc/pdf/201205.pdf. 23. Fair, R.C., 2009. Estimating how the Macroeconomy Works. Harvard University Press. 24. Feld, L.P., Larsen, C., 2005. Black Activities in Germany in 2001 and 2004: A Comparison Based on Survey Data. The Rockwool Foundation Research Unit, Copenhagen, Working Paper (12) Retrieved from: https://www.rockwoolfonden.dk/app/uploads/2015/12/Nyhedsbrev-juni -2005.pdf. 25. Feld, L.P., Larsen, C., 2012a. Das Ausmass Der Schatten Wirtschaft in Deutschland. University Press of Southern Denmark, Odense. 26. Feld, L.P., Larsen, C., 2012b. Undeclared Work, Deterrence and Social Norms: The Case of Germany. Springer-Verlag, Berlin, Heidelberg Dordrecht London New York. 27. Feld, L.P., Schneider, F., 2010. Survey on the shadow economy and undeclared earnings in OECD countries. Ger. Econ. Rev. 11 (2), 109–149. 28. Fethi, M.D., Fethi, S., Turan Katircioglu, S., 2006. Estimating the size of the Cypriot underground economy: A comparison with european experience. Int. J. Manpow. 27 (6), 515–534. 29. Frey, B.S., Weck-Hanneman, H., 1984. The hidden economy as an ‘unobserved’variable. Eur. Econ. Rev. 26 (1–2), 33–53. 30. Gamal, A.A.M., Dahalan, J.B., 2016. Underground economy in Saudi Arabia: A study based on currency demand function. J. Actual. Probl. Econ. 5 (179), 76–85. 31. Georgiou, G.M., 2007. Measuring the size of the informal economy: a critical review, Central Bank of Cyprus. Occas. Pap. Econ. 7 (01), 1–41. 32. Giles, D.E., 1999. Measuring the hidden economy: Implications for econometric modelling. Econ. J. 109 (456), 370–380. 33. Goel, R.K., Nelson, M.A., 2016. Shining a light on the shadows: Identifying robust determinants of the shadow economy. Econ. Model. 1 (58), 351–364. 34. Greenidge, K., Holder, C., Mayers, S., 2009. Estimating the size of the informal economy in barbados. J. Bus. Finance Econ. Emerg. Econ. 4 (1), 196–227. 35. Gulzar, A., Junaid, N., Haider, A., 2010. What is hidden, in the hidden economy of Pakistan? size, causes, issues, and implications. Pak. Dev. Rev. 49 (4), 665–704. 36. Gutmann, P.M., 1977. The subterranean economy. Financ. Anal. J. 33 (6), 26–27. 37. Hassan, M., Schneider, F., 2016. Size and development of the shadow economies of 157 countries worldwide: Updated and new measures from 1999 to 2013. Institute for the Study of labour (IZA), Working Papers (10281) Retrieved from: https://www.econstor.eu/bitstream/10419/149140/1/ dp10281.pdf. 38. Kasipillai, J., Baldry, J., Prasada Rao, D.S., 2000. Estimating the size and determinants of hidden income and tax evasion in Malaysia. Asian Rev. Account. 8 (2), 25–42. 39. Kirchgässner, G., 2016. On estimating the size of the shadow economy. Ger. Econ. Rev. 18 (1), 99–111. 40. Kohsaka, A., 2004. Fiscal Deficits in the Pacific Region. Routledge, New York. 41. Macias, J.B., Cazzavillan, G., 2009. The dynamics of parallel economies. Measuring the informal sector in Mexico. Res. Econ. 63 (3), 189–199. 42. MacKinnon, J.G., 1996. Numerical distribution functions for unit root and cointegration tests. J. Appl. Econom. 11 (6), 601–618. 43. Makochekanwa, A., 2013. Measuring the second economy in Zimbabwe. Botswana J. Econ. 10 (14), 27–58. 44. Mankiw, N.G., Ball, L., 2010. Macroeconomics and the Financial System, seventh ed. Palgrave Macmillan press, New York, US. 45. Masron, T.A., Amir, A., Ibrahim, H., 2011. Underground economy in Malaysia: Evidence from smuggling activities in Penang. Int. J. Curr. Res. 3 (5), 107–110. 46. Medina, L., Schneider, F., 2017. Shadow economies around the world: New results for 158 countries over 1991-2015. Centre for Economic Studies and Ifo Institute (CESifo), Munich, CESifo Working Paper (6430) Retrieved from: https://www.cesifo.org/DocDL/cesifo1_wp6430.pdf. 47. Mohamed, M., 2012. Estimating the underground economy from the tax gap: The case of Malaysia. Malays. J. Econ. Stud. 49 (2), 91–109. 48. Mohammad, A.F., 2004. Measuring the non-observed economy in Malaysia. Paper presented as country paper in the OECD on Assessing and Improving Statistical Quality, Bangkok city, Thailand, 11-14 2004. Retrieved from: http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.194.9256&rep= rep1&type=pdf. 49. Narayan, P.K., 2005. The saving and investment nexus for China: evidence from cointegration tests. Appl. Econ. 37 (17), 1979–1990. 50. Newey, W.K., West, K.D., 1987. A simple, positive semi-definite, heteroskedasticity and autocorrelation consistent covariance matrix. Econometrica 55 (3), 703–708. 51. Pesaran, M.H., Shin, Y., Smith, R.J., 2001. Bounds testing approaches to the analysis of level relationships. J. Appl. Econom. 16 (3), 289–326. 52. Phillips, P.C., Perron, P., 1988. Testing for a unit root in time series regression. Biometrika 75 (2), 335–346. 53. Pickhardt, M., Sarda, J., 2011. The size of the underground economy in Germany: a correction of the record and new evidence from the modified-cash-deposit-ratio approach. Eur. J. Law Econ. 32 (1), 143–163. 54. Pickhardt, M., Sarda, J., 2015. Size and causes of the underground economy in Spain: A correction of the record and new evidence from the MCDR approach. Eur. J. Law Econ. 39 (2), 403–429. 55. Restrepo-Echavarria, P., 2015. Measuring underground economy can be done, but it is difficult. Reg. Econ. 1 (15), 10–11. 56. Schneider, F., 2004. The Size of the Shadow Economies of 145 Countries all over the World: First Results over the Period 1999 to 2003. Institute for the Study of Labour (IZA), Working Paper (1431) Retrieved from: https://www.econstoreu/bitstream/10419/20729/1/dp1431.pdf. 57. Schneider, F., Bajada, C., 2003. The size and development of the shadow economies in the Asia-Pacific. Department of Economics, Johannes Kepler University Linz, Austria, Working Paper (0301) Retrieved from: https://www.econstor.eu/bitst ream/10419/73270/1/wp0301.pdf. 58. Schneider, F., Buehn, A., 2013. Estimating the size of the shadow economy: Methods, problems and open questions. CESifo Working Paper (4448) Retrieved from: https://www.cesifo.org/DocDL/cesifo1_wp4448.pdf. 59. Schneider, F., Buehn, A., 2018. Estimating a shadow economy: Results, methods, problems, and open questions. Open Econ. 1 (1), 1–29. 60. Schneider, F., Buehn, A., Montenegro, C.E., 2010. New estimates for the shadow economies all over the world. Int. Econ. J. 24 (4), 443–461. 61. Schneider, F., Hametner, B., 2014. The shadow economy in Colombia: Size and effects on economic growth, peace economics. Peace Sci. Public Policy 20 (2), 293–325. 62. Schneider, F., Klinglmair, R., 2005. Shadow economies around the world: What do we know?. Eur. J. Political Econ. 21 (3), 598–642. 63. Schwarz, G., 1978. Estimating the dimension of a model. Ann. Stat. 6 (2), 461–464. 64. Suhaimi, N.H.B.M., Al Mamun, A., Zainol, N.R., Nawi, N.C., Permerupan, Y., Malarvizhi, C.A., 2016. Characteristics of informal micro-entrepreneurs in Malaysia. Mediterr. J. Soc. Sci. 7 (2), 128–136. 65. Tan, Y.L., Habibullah, M.S., Kaliappan, S.R., Radam, A., 2017. Some new estimates of shadow economy for 80 countries using pooled mean group estimator. Int. J. Bus. Soc. 18 (1), 133–156. 66. Tan, Y.L., Habibullah, M.S., Yiew, T.H., 2016. The shadow economy in Malaysia: Evidence from an ARDL model. Int. J. Econ. Manage. 10 (2), 261–277. 67. Tanzi, V., 1980. Underground economy and tax evasion in the United States: estimates and implication. PSL Q. Rev. 33 (135), 427–453. 68. Tanzi, V., 1983. The underground economy in the United States: annual estimates, 1930-1980. Int. Monetary Fund (IMF) Staff Pap. 30 (2), 283–305. 69. Toda, H.Y., Yamamoto, G., 1995. Statistical inference in vector autoregressions with possibly integrated processes. J. Econometrics 66 (1–2), 225–250. 70. Yap, W.W., Sarmidi, T., Nor, A.H.S.M., Said, F.F., 2017. Shadow economy in Malaysia: A state level analysis. Pertanika J. Soc. Sci. Humanities 25 (3), 1365–1382. 71. Yasmin, B., Rauf, H., 2004. Measuring the underground economy and its impact on the economy of Pakistan. Lahore J. Econ. 9 (2), 93–103. 72. Yoke-Kee, E., Chin-Yoong, W., 2007. Fiscal Regime and Estimates of the Underground Economy in Malaysia: The Currency Demand Approach in Dynamic General Equilibrium Model. Paper Presented at the International Economic Conference on Trade and Industry in Trade and Industrialdevelopment: Contemporary Challenges and Policies, Organized by Universiti Utara Malaysia at Bayview City Hotel, Penang, Malaysia, 3-5 2007.
|
This material may be protected under Copyright Act which governs the making of photocopies or reproductions of copyrighted materials. You may use the digitized material for private study, scholarship, or research. |