Statistics of the hidden economy and informal activities inside the production boundary of the national accounts. An overview of national practices

Abstract

In five chapters, this paper reviews definitions, activities, measurements, the scale and, finally, the hidden economy and national accounts. The first chapter examines different concepts and approaches to the definition of the hidden economy. It calls attention to the distinction between the macro-economic, micro-economic and institutional-economic approach. The second chapter reviews different kind of activities within the hidden economy. It emphasizes the importance of appropriate definition in regard to this aspect of the hidden economy. The third chapter examines different methods of quantification as developed in Western Europe, United Kingdom and United States. It reviews both indirect approaches (monetary, fiscal, national accounts) as well as methods of direct measurement. The fourth and fifth chapter deal with the scale of the hidden economy in various countries. While the fourth chapter mainly examines results of the different estimates of the hidden economy size, the fifth chapter looks at different country's practices and treatment of the hidden economy within the system of national accounts. In the general conclusion, the author essentially stresses the difficulty of defining and measuring such an elusive phenomenon.