Rethinking the Informal Economy and the Hugo Effect

• 成果类型: Article
• 署名作者: Pappada, Francesco; Rogoff, Kenneth S.
• 署名单位: Universita Ca Foscari Venezia; Paris School of Economics; Harvard University
• 刊物名称: JOURNAL OF THE EUROPEAN ECONOMIC ASSOCIATION
• ISSN/ISSBN: 1542-4766
• DOI: 10.1093/jeea/jvaf006
• 发表日期: 2025
• 页码: 1743-1772
• 关键词: tax evasion; size

摘要

This paper offers a new approach to measuring the size of the informal economy based on VAT data for the European Union. Although data intensive, our evading value added duty economy (EVADE) measure is simpler and more transparent than existing measures. EVADE also shows more variation across countries of Europe than earlier measures, including higher informality in Greece, Italy, and Spain, for example. Moreover, we find considerably higher variation within countries across time; in a cross-country time series regression, controlling for tax rates, we confirm that the informal economy grows significantly in recessions and decreases in booms, which we term the Hugo effect.