359-369

• Alexandru, Adriana Anamaria
• Dobre, Ion

The paper aims to investigate the nature of the relationship between unemployment rate(UR) and the size of the U.S.A. shadow economy(SE) measured as % of official GDP for the period 1980-2009, using cointegration and granger causality tests. The size of the shadow economy estimated using the MIMIC model is decreasing over the last two periods, achieving the value of about 7.3% of official GDP at the middle of 2009. The empirical results point out the existence of a long-run relationship between the variables and a unidirectional causation that runs from unemployment rate to shadow economy. We extend the classical Okun΄s law, in order to estimate the relationship between growth rate of official economy, unemployment rate and the size of the shadow economy. The results reveal a significant direct relationship between shadow economy and the unemployment rate and an indirect relation between shadow economy and growth of official sector.

• Economics and Business
• Computer and information sciences

• Οικονομία
• Employment (Economic theory)
• Economic development
• Statistics

shadow economy, unemployment rate, MIMIC model, Johansen approach, VECM, Granger causality, Okun law

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