Modelling the Egyptian Shadow Economy: A Currency Demand and A MIMIC Model Approach

Arbeitspapier

We estimate the size and trend of the Egyptian shadow economy using two of the most common methods: the currency demand approach and the structural equation MIMIC model. To the best of our knowledge, this is the first comprehensive study to estimate the size of the shadow economy in Egypt during the last four decades (1976 to 2013). In addition to the standard explanatory variables used in the currency demand approach and MIMIC model, we consider variables that are specifically related to the Egyptian economy such as self-employment, agricultural importance and a proxy for institutional quality of democratic institutions. Our results indicate a decreasing trend of the size of the shadow economy from more than 50% in 1976 to 32% in 2013, yet it still comprises a large portion of the official GDP.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 5727

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 ; Tax Evasion and Avoidance ; Education and Research Institutions: General ; Formal and Informal Sectors; Shadow Economy; Institutional Arrangements ; Other Economic Systems: Political Economy; Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies
• Subject: shadow economy of Egypt ; currency demand approach (CDA) ; MIMIC estimation

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Hassan, Mai ; Schneider, Friedrich
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2016

Further information

• Handle: http://hdl.handle.net/10419/128432
• Last update: 10.03.2025, 11:42 AM CET