Book contents
- Frontmatter
- Contents
- List of contributors
- Preface
- Introduction
- Part I The meaning, measurement, and policy implications of the underground economies
- Part II The underground economy in Western developed nations: measurement in different laboratories
- 5 Monetary perspective on underground economic activity in the United States
- 6 The unrecorded economy and the national income accounts in the Netherlands: a sensitivity analysis
- 7 Assessing the underground economy in the United Kingdom
- 8 The underground economy in the Federal Republic of Germany: a preliminary assessment
- 9 The underground economy in Sweden
- 10 The irregular economy of Italy: a survey of contributions
- 11 The hidden economy in Norway with special emphasis on the hidden labor market
- 12 Canada's underground economy
- 13 The underground economy in France
- Part III The underground economy under central planning
- Bibliography
12 - Canada's underground economy
Published online by Cambridge University Press: 20 October 2009
- Frontmatter
- Contents
- List of contributors
- Preface
- Introduction
- Part I The meaning, measurement, and policy implications of the underground economies
- Part II The underground economy in Western developed nations: measurement in different laboratories
- 5 Monetary perspective on underground economic activity in the United States
- 6 The unrecorded economy and the national income accounts in the Netherlands: a sensitivity analysis
- 7 Assessing the underground economy in the United Kingdom
- 8 The underground economy in the Federal Republic of Germany: a preliminary assessment
- 9 The underground economy in Sweden
- 10 The irregular economy of Italy: a survey of contributions
- 11 The hidden economy in Norway with special emphasis on the hidden labor market
- 12 Canada's underground economy
- 13 The underground economy in France
- Part III The underground economy under central planning
- Bibliography
Summary
Measurement of unobserved economic activity in Canada has proven to be an elusive task. In this chapter, we define the two broad concepts of the unobserved economy, summarize the findings of studies that have dealt with this topic in the Canadian context, and present new estimates of unmeasured gross national product (GNP).
Defining the phenomenon
Although it is agreed that unobserved economic activity is the result of a complex interaction of legal, economic, political, cultural, and other institutional factors that vary from country to country, it is also apparent that there is no uniformly accepted definition of unobserved economic activity. It is therefore important to clarify possible concepts of unobserved economic activity at the outset.
It is useful to decompose total economic activity into money-based and non-monetary transactions (Feige, 1980). Non-monetary activities comprise both market activities (i.e., exchange) and non-market ones whether legal or illegal in nature. Included in this group are in-kind consumption and cooperatively organized exchange of professional services. The fact that this component of economic activity is so difficult to measure has resulted in the convention to exclude most non-monetary transactions from GNP. To the extent that shifts occur from the monetary observed to the non-monetary unobserved sector, the National Income and Product Accounts will present a biased picture of economic growth. Despite the obvious importance and far-reaching implications of nonmonetary economic activity (Kendrick, 1979; Eisner, 1978), this essay will concentrate on the monetary portion of unobserved economic activity.
- Type
- Chapter
- Information
- The Underground EconomiesTax Evasion and Information Distortion, pp. 267 - 280Publisher: Cambridge University PressPrint publication year: 1989