The Canadian Underground and Measured Economies: Granger Causality Results
14 Pages Posted: 22 Jul 2007 Last revised: 28 Feb 2010
Abstract
Using new time-series data for the size of the Canadian underground economy, the relationship between unreported and measured GDP in that country is examined. Granger causality tests are conducted, with a proper allowance for the non-stationarity of the data. It is found that there is clear evidence of such causality from measured GDP to hidden output, but only very mild evidence of Granger causality in the reverse direction. This result supports similar evidence for New Zealand reported by the first author, and has several interesting policy implications.
Keywords: underground economy, Granger causality, business cycles
JEL Classification: C53, H26
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
By Andrei Shleifer and Robert W. Vishny
-
By Simeon Djankov, Rafael La Porta, ...
-
By Simeon Djankov, Florencio Lopez-de-silanes, ...
-
By Simeon Djankov, Rafael La Porta, ...
-
The Invisible Hand and the Grabbing Hand
By Timothy Frye and Andrei Shleifer
-
By Juan Carlos Botero, Simeon Djankov, ...
-
By Juan Carlos Botero, Simeon Djankov, ...
-
Governance Matters Iii: Governance Indicators for 1996-2002
By Daniel Kaufmann, Aart Kraay, ...