Document Type : Research Paper

Author

• Ali Dalaei Milan

Abstract

This study uses "Multiple Indicators – Multiple Causes" approach to model the causal relationships between underground variables and to indicate main independent variables to estimate their impacts on dependent variable i.e. underground economy of Iran. Then it sketches the main features and estimating the size of Iranian underground economy. By employing annual time-series data of the period starting from1963/64 (1342) to 2011/12 (1391), results indicate that the mean size of the underground economy during this period was 17/82 per cent. The underground economy is significantly and positively affected by such variables as unemployment and inflation, but is negatively affected by the index of economic openness.

Keywords

• Underground Economy
• "Multiple Indicators – Multiple Causes" Approach
• Iran