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
8 - The underground economy in the Federal Republic of Germany: a preliminary assessment
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
In recent years, increased interest has been expressed in the underground economy of the Federal Republic of Germany. This unobserved sector of economic activity has been featured in numerous newspaper articles and has become a concern to institutions engaged in economic policy. In its 1977 annual report, the Deutsche Bundesbank stated (p. 23) that “cash payment is unequestionably gaining ground in some fields, notably in the ‘grey areas’ of business activity where services are rendered without taxes and contributions to the social security system and are settled in cash.” Similarly, the German Council of Economic Advisers (Sachverstanndigenrat) (1980, paragraph 296; 1981, paragraph 373) stated that the growth of the “Schattenwirtschaft” indicates resistance against increasing tax burdens and excessive regulations.
To shed some more light on this neglected part of the German economy, this chapter attempts to estimate the size and the growth of the unobserved sector in Germany.
Definitions
As a first step, one must make an effort to clarify the confusion in the literature resulting from different definitions. Terms like “subterranean” or “underground” may be misleading because they create the impression of illegal and immoral activities. Most authors (Feige, 1980; Frey, 1981; Tanzi, 1980) define the unobserved sector as a complement of the observed sector. It includes therefore all those economic activities that are not measured by the current official measurement system.
- Type
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- Information
- The Underground EconomiesTax Evasion and Information Distortion, pp. 197 - 218Publisher: Cambridge University PressPrint publication year: 1989
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