The Causal Relationship Between Unemployment Rate and Underground Economy in Iran

Khossrow Piraee; Hossinali Rajaee

doi:doi:10.11648/j.ijebo.20150302.12

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The Causal Relationship Between Unemployment Rate and Underground Economy in Iran

Khossrow Piraee, Hossinali Rajaee

Published in International Journal of Economic Behavior and Organization (Volume 3, Issue 2)

Received: 21 March 2015 Accepted: 15 April 2015 Published: 24 April 2015

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Abstract

The paper investigated the causal relationship between IRAN underground economy and unemployment rate with Toda-Yamamoto approach for annual data during the period 1973-2012. The size of the underground economy measured as official GDP is estimated using a Multiple indicator- Multiple Causes (MIMIC) approach. The size of the underground economy has been associated with increased over the four decades, However has fluctuations in the first two decades but shows quite ascending trend in the last two decades. The empirical results point out that there is strong evidence of uni-directional causality running from unemployment rate to underground economy.

Published in	International Journal of Economic Behavior and Organization (Volume 3, Issue 2)
DOI	10.11648/j.ijebo.20150302.12
Page(s)	23-28
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2015. Published by Science Publishing Group

Keywords

Underground Economy, Unemployment Rate, MIMIC Model, Toda-Yamamoto Approach

References

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[2]	Arabmazar ,Ali (1982) .Black eeconomy in iran:size, causes and indicator in last three decade , journal of Program and Budget ,No 62 pp.3-62
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[5]	Dell’Anno, Roberto, Miguel Gomez, and Angel Alañón Pardo (2007), “Shadow economy in three different Mediterranean countries: France, Spain and Greece. A MIMIC approach”, Empirical Economics 33: 51-84.
[6]	Dell’Anno, Roberto, and Friederich Schneider (2006), “Estimating the underground economy:A response to T. Breusch’s critique”, Working Paper 06/07, Department of Economics,Johannes Kepler University of Linz.
[7]	Dickey, D., Fuller,W.A.(1981). Likelihood ratio statistics for autoregressive time series with a unit root, Econometrica, Vol. 49, 1981, pp. 1057-72.
[8]	Enste, D.H.(2003). Shadow Economy and Institutional Change in Transition Countries in Boyan Belev (eds.), The Informal Economy in the EU Assessment Countries: Size, Scope, Trends and Challenges of the Process of EU-enlargement, Center for Study of Democracy, 2003, Sofia, 81-114.
[9]	Giles, D.E.A.(1999).Modeling the hidden economy in the tax-gap in New Zealand, Empirical Economics, vol.24, no.4/1999, pp.621-640.
[10]	Jöreskog, K., Goldberger, A.S.(1975). Estimation of a model with multiple indicators and multiple causes of a single latent variable, Journal of the American Statistical Association, 70/1975, pp.631-639.
[11]	Khalatbari, Firoze. (1980). Underground economy in iran,Ronagh jounal , No 1 ,PP.5-11.
[12]	Lubell, H. (1991): The informal sector in the 1980’s and 1990’s, Paris: OECD
[13]	Phillips, P.B., Perron, P.(1985). Testing for a unit root in time series regression, Biometrica, Vol. 75, 1985, pp. 335-346.
[14]	Schneider.F, D.H., Enste (2000) Shadow economies: size, causes and consequences, Journal of Economic Literature 38, , pp. 77-114
[15]	Schneider, F.(2009). Shadow Economies and Corruption all over the world: New estimates for 145 Countries, Economics, 2009, pp. 1-47.
[16]	Tedds . L (1998), Measuring the size of the hidden economy in Canada: a latent variable/MIMIC model approach. Unpublished M.A. Extended Essay, Department of Economics, University of Victoria
[17]	Toda, H.Y., Yamamoto, H (1995) . Statistical inference in vector autoregressions with possibly integrated processes. Journal of Econometrics, Vol. 66/1995, pp. 225-250.

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APA Style

Khossrow Piraee, Hossinali Rajaee. (2015). The Causal Relationship Between Unemployment Rate and Underground Economy in Iran. International Journal of Economic Behavior and Organization, 3(2), 23-28. https://doi.org/10.11648/j.ijebo.20150302.12

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ACS Style

Khossrow Piraee; Hossinali Rajaee. The Causal Relationship Between Unemployment Rate and Underground Economy in Iran. Int. J. Econ. Behav. Organ. 2015, 3(2), 23-28. doi: 10.11648/j.ijebo.20150302.12

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AMA Style

Khossrow Piraee, Hossinali Rajaee. The Causal Relationship Between Unemployment Rate and Underground Economy in Iran. Int J Econ Behav Organ. 2015;3(2):23-28. doi: 10.11648/j.ijebo.20150302.12

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@article{10.11648/j.ijebo.20150302.12,
  author = {Khossrow Piraee and Hossinali Rajaee},
  title = {The Causal Relationship Between Unemployment Rate and Underground Economy in Iran},
  journal = {International Journal of Economic Behavior and Organization},
  volume = {3},
  number = {2},
  pages = {23-28},
  doi = {10.11648/j.ijebo.20150302.12},
  url = {https://doi.org/10.11648/j.ijebo.20150302.12},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijebo.20150302.12},
  abstract = {The paper investigated the causal relationship between IRAN underground economy and unemployment rate with Toda-Yamamoto approach for annual data during the period 1973-2012. The size of the underground economy measured as official GDP is estimated using a Multiple indicator- Multiple Causes (MIMIC) approach. The size of the underground economy has been associated with increased over the four decades, However has fluctuations in the first two decades but shows quite ascending trend in the last two decades. The empirical results point out that there is strong evidence of uni-directional causality running from unemployment rate to underground economy.},
 year = {2015}
}

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TY  - JOUR
T1  - The Causal Relationship Between Unemployment Rate and Underground Economy in Iran
AU  - Khossrow Piraee
AU  - Hossinali Rajaee
Y1  - 2015/04/24
PY  - 2015
N1  - https://doi.org/10.11648/j.ijebo.20150302.12
DO  - 10.11648/j.ijebo.20150302.12
T2  - International Journal of Economic Behavior and Organization
JF  - International Journal of Economic Behavior and Organization
JO  - International Journal of Economic Behavior and Organization
SP  - 23
EP  - 28
PB  - Science Publishing Group
SN  - 2328-7616
UR  - https://doi.org/10.11648/j.ijebo.20150302.12
AB  - The paper investigated the causal relationship between IRAN underground economy and unemployment rate with Toda-Yamamoto approach for annual data during the period 1973-2012. The size of the underground economy measured as official GDP is estimated using a Multiple indicator- Multiple Causes (MIMIC) approach. The size of the underground economy has been associated with increased over the four decades, However has fluctuations in the first two decades but shows quite ascending trend in the last two decades. The empirical results point out that there is strong evidence of uni-directional causality running from unemployment rate to underground economy.
VL  - 3
IS  - 2
ER  -

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Author Information

Khossrow Piraee

Department of Managment and Economics, Shiraz, University of Islamic Azad, Pardis, Sihiraz, Iran
Hossinali Rajaee

Department of Managment and Economics, Shiraz, University of Islamic Azad, Pardis, Sihiraz, Iran

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APA Style

Khossrow Piraee, Hossinali Rajaee. (2015). The Causal Relationship Between Unemployment Rate and Underground Economy in Iran. International Journal of Economic Behavior and Organization, 3(2), 23-28. https://doi.org/10.11648/j.ijebo.20150302.12

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ACS Style

Khossrow Piraee; Hossinali Rajaee. The Causal Relationship Between Unemployment Rate and Underground Economy in Iran. Int. J. Econ. Behav. Organ. 2015, 3(2), 23-28. doi: 10.11648/j.ijebo.20150302.12

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AMA Style

Khossrow Piraee, Hossinali Rajaee. The Causal Relationship Between Unemployment Rate and Underground Economy in Iran. Int J Econ Behav Organ. 2015;3(2):23-28. doi: 10.11648/j.ijebo.20150302.12

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@article{10.11648/j.ijebo.20150302.12,
  author = {Khossrow Piraee and Hossinali Rajaee},
  title = {The Causal Relationship Between Unemployment Rate and Underground Economy in Iran},
  journal = {International Journal of Economic Behavior and Organization},
  volume = {3},
  number = {2},
  pages = {23-28},
  doi = {10.11648/j.ijebo.20150302.12},
  url = {https://doi.org/10.11648/j.ijebo.20150302.12},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijebo.20150302.12},
  abstract = {The paper investigated the causal relationship between IRAN underground economy and unemployment rate with Toda-Yamamoto approach for annual data during the period 1973-2012. The size of the underground economy measured as official GDP is estimated using a Multiple indicator- Multiple Causes (MIMIC) approach. The size of the underground economy has been associated with increased over the four decades, However has fluctuations in the first two decades but shows quite ascending trend in the last two decades. The empirical results point out that there is strong evidence of uni-directional causality running from unemployment rate to underground economy.},
 year = {2015}
}

Copy | Download

TY  - JOUR
T1  - The Causal Relationship Between Unemployment Rate and Underground Economy in Iran
AU  - Khossrow Piraee
AU  - Hossinali Rajaee
Y1  - 2015/04/24
PY  - 2015
N1  - https://doi.org/10.11648/j.ijebo.20150302.12
DO  - 10.11648/j.ijebo.20150302.12
T2  - International Journal of Economic Behavior and Organization
JF  - International Journal of Economic Behavior and Organization
JO  - International Journal of Economic Behavior and Organization
SP  - 23
EP  - 28
PB  - Science Publishing Group
SN  - 2328-7616
UR  - https://doi.org/10.11648/j.ijebo.20150302.12
AB  - The paper investigated the causal relationship between IRAN underground economy and unemployment rate with Toda-Yamamoto approach for annual data during the period 1973-2012. The size of the underground economy measured as official GDP is estimated using a Multiple indicator- Multiple Causes (MIMIC) approach. The size of the underground economy has been associated with increased over the four decades, However has fluctuations in the first two decades but shows quite ascending trend in the last two decades. The empirical results point out that there is strong evidence of uni-directional causality running from unemployment rate to underground economy.
VL  - 3
IS  - 2
ER  -

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