Boris Brodskiy

Shadow structures and virtual «traps»: models of informal activities in transition

2000. Vol. 4. No. 4. P. 433–453 [issue contents]

The article is devoted to the analysis of patterns of macroeconomic evolution of the shadow sector for transition economies of various types. For R-economies (rich natural resources, emphasis on the priority development of export-oriented extractive industries), the share of the shadow sector in GDP is steadily growing, while for L-economies (relatively poor natural resources, emphasis on the development of manufacturing industries), the parabolic dynamics of the share of the shadow sector in GDP is characteristic, which is a mirror image of the U-shaped pattern of the dynamics of aggregate output . These fundamental differences are explained by the significant role of trade and financial mediation mechanisms in R-economies: the collapse of the macroeconomic structure of the R-economy into several sectors that differ in terms of competition in the domestic and foreign markets leads to a sharp increase in transaction costs of economic exchanges and the possibility of extracting a significant margin for intermediary services. Models of the informal sector dynamics in transition economies of type R and L are based on a structuralist approach: the dynamics of the main financial indicators of enterprises in various sectors is considered, taking into account the factors of transaction costs caused by trade and financial mediation mechanisms. A formal analysis of these models allows us to draw conclusions about the effectiveness of traditional macroeconomic policy tools in the transition economies of R and L.

Citation: Brodskiy Boris Boris E. (2000) Tenevye struktury i virtual'nye "lovushki": modeli neformal'nogo sektora v perekhodnykh ekonomikakh [Shadow structures and virtual «traps»: models of informal activities in transition] HSE Economic Journal , vol. 4, no 4, pp. 433-453 (in Russian)
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