economies (EMDEs). Second, it documents the cyclical features of the informal economy. Overall, informal economy recessions … (recoveries) do not differ significantly from those of formal economy. Like formal-economy business cycles, informal-economy …

We study the degree of synchronization between formal- and informal-economy business cycles. Using a comprehensive … formal-sector output. Second, movements in the formal economy tend to spillover to the informal economy. Using a novel set of …

). We show that incorporating forward-looking expectations into standard open economy structural VAR models resolves these …