ABSTRACT
This chapter explains the estimates of the underground economy in 145 countries first presented by Schneider and Enste using the DYMIMIC and currency demand approach. When making comparisons between the estimates of the underground economy, people limit themselves to those groups of countries that are at similar phases in their economic development. Nevertheless international estimates of the size of the underground economy appear to suggest that there has been an increase in its size over time. A very popular methodology for estimating the size of the underground economy is the so-called 'monetary methods'. Development of monetary indicators: if activities in the underground economy increase, additional monetary transactions are required, particularly if cash is used to avoid detection. The MIMIC model does not produce an estimate of the underground economy that can be interpreted, for example, as a percentage of gross domestic product. Rather the approach produces an index of estimated underground economic activity.
