Underground Shocks Ground Zero Responses

The aim of this paper is twofold. First, new annual data on Italian irregular sector for the period 1980-1991 are reconstructed. These data are compatible with the available 1992-2001 official data. Second, based on this self-consistent “long” sample a time series analysis of the two sides – the underground and the regular - of the Italian GDP is performed. Results from univariate and VAR models seem to suggest that there are no connections (causal relationship, feedbacks, contemporaneous cyclical movements, common stochastic trends) between these two time series. In this sense, we could correctly refer to the Italian black sector as an “independent economy”.