Comment on Feige's Paper 'Reflections on the Meaning and Measurement of Unobserved Economies: What Do We Really Know about the 'Shadow Economy'?'

15 Pages Posted: 20 Apr 2016

See all articles by Friedrich Schneider

Friedrich Schneider

Johannes Kepler University Linz - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute for Economic Research); Institute for the Study of Labor (IZA)

Date Written: March 23, 2016

Abstract

This comment provides a reply to Prof. Feige’s paper with the title “Reflections on the Meaning and Measurement of Unobserved Economies: What do we really know about the ‘Shadow Economy’?”, in which Prof. Feige heavily criticizes me. I show that the same critique which Prof. Feige raises against me can be put forward to his results on the non-observed economy. Moreover, I show that my dataset is appropriately documented and I also address the problem of calibration and normalization issues when undertaking a MIMIC estimation. In the concluding chapter I suggest that a joint paper should be written in which all the pros and cons of each method of estimating the size and development of the non-observed/shadow economy are presented and criticized.

Keywords: Shadow Economy, Non-Observed Economy or Income, Macro Approaches, MIMIC and Currency Demand Approach

JEL Classification: C51, C82, E26, E41, H26, K42, O17

Suggested Citation

Schneider, Friedrich G., Comment on Feige's Paper 'Reflections on the Meaning and Measurement of Unobserved Economies: What Do We Really Know about the 'Shadow Economy'?' (March 23, 2016). CESifo Working Paper Series No. 5818, Available at SSRN: https://ssrn.com/abstract=2766885

Friedrich G. Schneider (Contact Author)

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