Trying to glimpse the ‘grey economy’

Charles A.E. Goodhart, Jonathan Ashworth 08 October 2014

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It is a remarkable fact that the ratio of currency to GDP in the UK has been rising, despite the greater use of card and online payments (see Figure 1). The currency-to-GDP ratio now stands at 16.1%, compared to 13.3% in Q4 2007. Currency in circulation per adult person is now equal to around £1,300 in the UK. In some other equivalent cases – e.g. holdings of US dollars, euros, and Swiss francs – this might be because more currency is being hoarded abroad, but this is not likely to be the case for the UK. So what is fuelling this rise in currency usage, if not the grey economy?

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Topics:  Europe's nations and regions Frontiers of economic research Global crisis

Tags:  global crisis, underground economy, shadow economy, hidden economy, grey economy, black economy, measurement, Currency, UK, tax evasion, GDP, GDP measurement, national accounts

Mismeasuring long-run growth: The bias from spliced national accounts

Leandro Prados de la Escosura 27 September 2014

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In April it was made public that Nigeria’s GDP figures for 2013 had been revised upwards by 89%, as the base year for its calculation was brought forward from 1990 to 2010 (Financial Times, 7 April 2014). As a result, Nigeria became the largest economy in sub-Saharan Africa. Though spectacular, this is not an exceptional case. Ghana (2010), Argentina (1993), and Italy (1987) also experienced dramatic upward revisions of their GDP. How should this revision affect GDP time series and, consequently, the country’s relative position?

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Topics:  Development Economic history

Tags:  GDP, GDP measurement, national accounts, statistics, measurement, measurement error, data

Has the Great Recession harmed the long-term growth prospects of the Eurozone economy?

Philippe Weil interviewed by Viv Davies,

Date Published

Fri, 06/20/2014

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See Also

CEPR Business Cycle Dating Committee (2014), "Eurozone mired in recession pause", VoxEU.org, 17 June.

CEPR Business Cycle Dating Committee (2014), "Euro Area Mired in Recession Pause", www.cepr.org, 11 June.

 

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Topics

Europe's nations and regions Global crisis
Tags
eurozone, growth, GDP, recession, business cycles, CEPR, trough, business cycle dating, expansion, peak

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Recoveries: The missing third phase of the business cycle When did the Eurozone recession end? The US recession ended in May Eurozone in recession since 3rd quarter 2011
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Eurozone mired in recession pause

CEPR Business Cycle Dating Committee 17 June 2014

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The CEPR Business Cycle Dating Committee met on 11 June 2014 to determine whether the Eurozone is out of the recession that started after 2011Q3. The duty of the Committee – comprised of Philippe Weil (Chair), Domenico Giannone, Refet Gürkaynak, Monika Merz, Richard Portes, Lucrezia Reichlin, Albrecht Ritschl, Barbara Rossi, and Karl Whelan – is to date peaks and troughs of the Eurozone business cycle, marking recessions and expansions – a role similar to that of the NBER Business Cycle Dating Committee in the US.

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Topics:  Europe's nations and regions Global crisis

Tags:  eurozone, growth, GDP, recession, business cycles, CEPR, trough, business cycle dating, expansion, peak

Lights, camera ... income!: Estimating poverty using national accounts, survey means, and lights

Maxim Pinkovskiy, Xavier Sala-i-Martin 27 February 2014

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How many people are poor, and how fast are they leaving poverty? The World Bank (Chen and Ravallion 2001, 2010) says that a quarter of the people in the developing world lived on an income of less than $1.25 a day (the threshold of absolute poverty defined by the lowest poverty lines in developing countries), down from about 40% in 1992.

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Topics:  Development Poverty and income inequality

Tags:  GDP, surveys, satellite

A penny spent is a penny earned (by someone else): Measuring GDP

S Borağan Aruoba, Francis X. Diebold, Jeremy J Nalewaik, Frank Schorfheide, Dongho Song 03 December 2013

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“A growing number of economists say that the government should shift its approach to measuring growth. The current system emphasises data on spending, but the bureau also collects data on income. In theory the two should match perfectly – a penny spent is a penny earned by someone else. But estimates of the two measures can diverge widely, particularly in the short term...”
[Binyamin Appelbaum, The New York Times, 16 August 2011]

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Topics:  Frontiers of economic research

Tags:  US, GDP, unemployment, data, measurement, national income accounting

Why have developing-country data on real incomes been revised so much?

Martin Ravallion 26 March 2010

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The International Comparison Program (ICP) collects the survey data on prices across countries that are used to estimate Purchasing Power Parity exchange rates (PPPs for short). These are then used to make international comparisons of real incomes and for other purposes, including measuring global poverty and inequality.

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Topics:  Development

Tags:  GDP, World Bank, data, purchasing power parity

Did financial globalisation make the US crisis worse?

Enrique G. Mendoza, Vincenzo Quadrini 14 November 2009

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The global financial crisis that started with the meltdown of the US subprime mortgage market in 2007 was preceded by a protracted period of growth in debt and leverage ratios in an environment of increasing world financial integration, low real interest rates, and growing US external deficits. Figures 1–3 show that, since the early 1980s, in tandem with the early stages of financial globalisation, credit in the US economy grew substantially and an increasing fraction of this credit boom was fuelled by foreign lending.

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Topics:  Global economy

Tags:  GDP, financial globalisation, global crisis

Business cycles become less synchronised over time: Debunking “decoupling”

Andrew K Rose 01 August 2009

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Much recent research has investigated the degree of cross-country synchronisation of business cycles, primarily from an empirical perspective.

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Topics:  Global economy

Tags:  GDP, business cycles, decoupling

Want faster European growth? Learn to love creative destruction

Nicholas Crafts 11 July 2008

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Paul Krugman once observed that 3% per year is about as good as it gets for GDP growth in advanced economies. While the United States has achieved this since 1995, the EU15 have fallen well short – averaging only 2.3%.

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Topics:  Competition policy Productivity and Innovation

Tags:  competition, GDP, labour productivity growth

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