An analysis of the shadow economy in Malta: A currency demand and MIMIC model approach

Arbeitspapier

The paper applies two commonly used methods in the literature to estimate the shadow economy in Malta, the Currency Demand Approach and the Multiple Indicator Multiple Causes (MIMIC) model. Given the unobservable nature of the shadow economy, estimates are surrounded by a considerable degree of uncertainty. While these two methods differ somewhat on the historical evolution of the size of the Maltese shadow economy, which in turn can be traced back to their different underlying assumptions, both suggest that it has remained relatively stable over the last decade, standing at just below 21% of official GDP in 2019. Where possible, these estimates are compared to other studies on the same subject where we find that the dynamic properties of our variable follow those found in the literature.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CBM Working Papers ; No. WP/02/2020

Classification and Topics

• Classification: Wirtschaft ; Multiple or Simultaneous Equation Models: Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models ; Informal Economy; Underground Economy ; Tax Evasion and Avoidance ; Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
• Subject: Shadow economy ; Structural modelling ; MIMIC ; Currency demand approach ; Malta

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Gauci, Tiziana Marie ; Rapa, Noel
• Event: Veröffentlichung
• (who): Central Bank of Malta
• (where): Valletta
• (when): 2020

Further information

• Handle: http://hdl.handle.net/10419/237302
• Last update: 10.03.2025, 11:43 AM CET