n South African Journal of Economic and Management Sciences - Measuring the informal economy in South Africa : economics
|Article Title||Measuring the informal economy in South Africa : economics|
|© Publisher:||University of Pretoria|
|Journal||South African Journal of Economic and Management Sciences|
|Author||Stephen Saunders and Elsabe Loots|
|Publication Date||Mar 2005|
|Pages||92 - 101|
|Keyword(s)||C22 and E01|
ISI Social Science
Measuring the size of the South African informal economy has received inadequate attention, making it difficult for policy-makers to assess the impact of policy measures to stimulate informal economic activity. This article aims to estimate the size of the informal economy by using the Currency Demand Approach. The empirical results reveal that the informal economy as a percentage of GDP decreased from 1967 to 1993, before levelling off. The growth in the informal economy has also under-performed in comparison to formal economic growth. There appears to be a causal relationship running from the informal to the formal economy. Macroeconomic policies aimed at the formal economy will not necessarily "trickle down" to the informal, while these policies aimed at the informal economy may have a profound effect on the formal economy.
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