Impact of the hidden economy on growth rates in Hungary

Article type: Research Article

Authors: Árvay, J.^{; 1} | Vértes, A.

Affiliations: UN/ECE Statistical Division, Palais des Nations, 1211 Geneva 10, Switzerland

Note: [1] This paper was first presented at the twenty-third General Conference of the International Association for Research in Income and Wealth held from August 21–27, 1994 in Canada.

Abstract: Since the beginning of the transition period it was the general view of economists that the officially measured GDP of Hungary does not reflect properly the level and sectoral origin of economic performance. Therefore, a special research project was carried out, with the financial assistance of the Canadian Government and OECD, for estimating the size and composition of the hidden economy in 1992 applying several parallel, independent approaches. The estimates for this year were extrapolated for the period 1980–1993. The study describes the basic methods used, the results obtained, the reflection of a part of the hidden economy in the official GDP and finally the impact of the hidden economy on the growth rates for the last 13 years, distinguishing the periods before and after the start of transition. It introduces, in addition to the “official” term, the term of the “documented” and “extended” GDP.

DOI: 10.3233/SJU-1995-12104

Journal: Statistical Journal of the United Nations Economic Commission for Europe, vol. 12, no. 1, pp. 27-39, 1995