| Keywords [eng] |
Keywords: shadow economy, taxes, MIMIC, latent variable, currency demand model. Raktiniai žodžiai: šešėlinė ekonomika, mokesčiai, MIMIC, latentinis kintamasis, pinigų paklausos modelis. |
| Abstract [eng] |
Modeling Shadow Economy J. Zajankauskaitė. Modeling shadow economy: master thesis/ supervisor Prof., Habil. dr. Vydas Čekanavičius; Vilnius university, faculty of Mathematics and Informatics, department of Statistical Analysis. The scope of this master thesis includes the analysis of the shadow economy in Lithuania covering the period from 2000 Q1 to 2020 Q2. The study focuses on the problem related to an unobserved variable that cannot be measured directly. Shadow economy as immeasurable economic phenomenon might be an urgent economic problem causing serious consequences on the official economy of the country. Therefore, the aim of the master thesis is to identify the size of the shadow economy in Lithuania and to review determinants significantly influencing the shadow economy. As a result, three approaches of estimation of the extent of the shadow economy have been proposed. Currency demand model, multiple indicators, multiple causes model and newly developed approach of hybrid CDM-MIMIC exposed that the shadow economy in Lithuania tends to shrink over the period for 2000 to 2020 (except recession time and period for 2019-2020). Also, the output of the econometric modeling has presented that the main causal factors affecting the shadow economy are tax burden and indicators reflecting general economic situation in the country (GDP, unemployment rate, short-run interest rate, inflation, wages, etc.). The results of this paper serve to get a better understanding about the main tendencies of Lithuanian shadow market as well as help to identify principal instruments of controlling shadow economy in the country for policy makers. |
