ABSTRACT
Growth forecasts from respected bodies such as the International Monetary Fund or the Organisation for Cooperation and Development often provide the lead for an economic news story. During the financial crisis China picked up the baton for global economic growth and has been running with it ever since albeit at a slower pace. Gross domestic product indicates the amount of economic production taking place in an economy, calculated as the total output within a specific year. Macroeconomic and microeconomic modelling studies based on data from several countries suggest that the major driving forces behind the size and growth of the shadow economy are an increasing burden of tax and social security payments, combined with rising restrictions in the official labour market. Technological progress increases economic growth in two ways: it cuts the average cost of production of a product and it creates new products for the market which consumers want to spend money on.
