International marekts and the shadow economy

Aims of the course

getting familiar with the primary manifestations of the shadow economy
the role of good and capital markets in the development of the shadow economy
measuring the shadow economy
the relationship between the development of the economy and the extent of the shadow economy

Course syllabus

Shadow economy represents a major challenge in many mainly developing economies. Although several studies point to the potential positive social consequences of shadow economy (poverty reduction), these results are significantly outnumbered by those stressing the negative impact on economic growth and development in the longer run. The complexity of outcomes makes shadow economy one of the most interesting economic, legal and social issues.

The course will deal with several aspects of shadow economy. First, a careful description of shadow economy and main activities will be provided, followed by a careful study of both positive and negative consequences. Globalization is changing the face of the global economy and is as such impacting also the nature of shadow economy, which is becoming more and more present also in international trade and finance. The broadening of activities across the border is changing the division of consequences among nations and is also impacting the nature of business practices and the choice of 'industries' in shadow economy. To analyze the consequences of shadow economy on both national and international economy the size and structure of the activity must be measured. But the gap between the measured size of such activities obtained by different methodologies suggests that there are still significant problems that will need to be solved.

Course director(s)