The Research On The Method Of Measuring The Scale Of Our Country's Informal Economy And The Empirical Analysis

The informal economy is a common phenomenon existing in the society, and hadn't received people's concern for a long time. Until the sixties of the 20th century, serious "stagflation" took place in the western countries- on one hand the inflation rate remained high, on the other hand the rate of unemployment raised rapidly, the traditional economic theory couldn't explain it, so people began to change their study to the informal economy.The existence of informal economy puzzles national statistics, and causes serious influence in every field of the society, such as economical operation, social safety, etc. Therefore, the study on the informal economy, especially on the scale of it, is the demand of era development. The western research on the method of measuring the scale of informal economy began at the sixties of the 20th century, and now proposed a lot of methods, such as cash ratio model, demand of currency method, etc. In our country, the study on informal economy began at about ten years ago, and now is still at the starting stage. On the base of western research results, our economists put forward a lot of measuring methods, such as whole social freight traffic model, underground GDP division model, etc. But all these methods are restrained. This paper firstly dwells on these methods, then analyzes the restrains of cash ratio model, demand of currency method, and underground GDP division model, in order to point out the direction of improvement. At the same time, this paper advanced the underground GDP division model- relaxed its premise assumption, to perfect its theory and make it more suitable for our country.This paper has five parts.Part 1: The brief introduction of informal economy.This part begins with the introduction of Philips curve theory, then dwells on the historical origins that the informal economy problem put forward. After that the paper introduces all kinds of the definition of informal economy. On the base of this, the author tries to define the meaning and the range of informal economy.Part 2: The status and influence of the informal economy in our country.This part introduces the status and characteristics of the informal economy in our country, and analyzes the reason why it appeared. On the base of this, the author analyzes the characteristics of informal economic operation and the influence of it, then points out the practical meaning of studying it.Part 3: The measuring of the scale of our country's informal economy.This part is the key chapter of the whole paper. Firstly this part briefly introduces the methods of measuring the scale of informal economy in the world. Then it gives a deep research on the survey method which contains sensitive problems, and puts forward the sum of random variables model which has three variables. In addition, this part detailedly introduces cash ratio model, demand of currency method, underground GDP division model, and at last uses those three methods to estimate the scale of Chinese informal economy from 1979 to 2003.Part 4: The new research on the method of measuring the scale of informaleconomy—the development of underground GDP division model.This part is the key part too. On the base of former research, this part analyzes the restrains of cash ratio model, demand of currency method, underground GDP division model, and develops the underground GDP division model.Part 5: The suggestion to harness the informal economy in our country.According to the status and characteristics of Chinese informal economy, this part puts forward some suggestion to harness the informal economy in our country from perfecting existing statistics system respect, confirming reasonable scale of informal economy respect, administration countermeasure of informal economy respect.