Title: Beauty and the beast: is shadow economy a shock absorber under economic slowdown? Evidence from Poland

Authors: Bogdan Mróz

Addresses: Warsaw School of Economics, al. Niepodległości 162, 02-554 Warszawa, Poland

Abstract: The paper is focused on the analysis of Poland's shadow economy under economic slowdown and its implications for the country's economy and Polish society. The basic objective of the paper is to provide an empirical picture and shed some light on the causes, dynamics and consequences of the existence and development of the informal sector in Poland. The author tries to analyse the 'pros' and 'cons', e.g. positive and negative aspects of the shadow economy. On the one hand, informal economic activity often involves infringement of law and considerable social and economic costs. On the other hand, it has the effect of boosting production and stimulating consumer demand. A full, objective analysis of the shadow economy must therefore take into account both the adverse and the beneficial consequences, at the macro- and micro-economic level, and cannot ignore its social and psychological implications.

Keywords: shadow economy; informal labour markets; unregistered work; tax evasion; economic slowdown; Poland; shock absorbers; economic costs; production growth; consumer demand; social implications; psychological implications.

DOI: 10.1504/IJTGM.2015.069420

International Journal of Trade and Global Markets, 2015 Vol.8 No.2, pp.79 - 96

Received: 07 May 2014
Accepted: 14 Jun 2014
Published online: 15 May 2015 *

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