An informal economy (or shadow economy) is the part of any economy that is neither taxed nor monitored by any form of government.
The Informal sector makes up a larger share of poorer, more agricultural and less developed economies.
In many poorer countries as found in the Frontier Markets, a very large swathe of activity can remain uncounted and hence outside national accounts. Due to the nature of much informal work, ranging from housework, farming through to gambling, prostitution, drug dealing, and smuggling, calculations of the value of such activities are difficult.
The size of China’s informal economy is estimated to be 12.7% which represents approximately $3,160 billion at GDP PPP levels.
Informal Economy
World Economics
https://www.worldeconomics.com/Concepts/InformalEconomy/
An informal economy (or shadow economy) is the part of any economy that is neither taxed nor monitored by any form of government.
The Informal sector makes up a larger share of poorer, more agricultural and less developed economies.
Why Measure the Informal Economy?
In many poorer countries as found in the Frontier Markets, a very large swathe of activity can remain uncounted and hence outside national accounts. Due to the nature of much informal work, ranging from housework, farming through to gambling, prostitution, drug dealing, and smuggling, calculations of the value of such activities are difficult.
Methodologies
There have been many attempts to estimate the size of parts of the informal economy using both direct and indirect approaches, Leandro Medina and Friedrich Schneider describe these in their 2018 IMF Working Paper as:
Direct approaches:
In-direct approaches:
China’s Informal Economy Size
INFORMAL ECONOMY SIZE AS A PERCENTAGE OF GDP (%)
World Economics
https://www.worldeconomics.com/Informal-Economy/China.aspx
An informal economy (informal sector or shadow economy) is the part of any economy that is neither officially taxed nor monitored. Read more about the World Economics Informal Economy database
The size of China’s informal economy is estimated to be 12.7% which represents approximately $3,160 billion at GDP PPP levels.