We use an “unexplained demand for cash” approach to measure the size of the shadow economy in Sweden. The size of the shadow economy is found to have increased from 3.8 to 6.5 per cent of GDP from 1990 to 2004. This result is also supported by our finding of an increased residual between...

To evaluate critically the common assumption that consumers purchase goods and services on an off-the-books basis so as to save money, this paper reports a 27-nation European survey that interviewed 26,659 citizens in 2007 about their undeclared transactions. This reveals that saving money is...