>That is not necessarily surprising. GDP is the sum of the value added
>by four institutional sectors: government, corporations (financial and
>nonfinancial), household and nonprofit institutions serving households
>(npish). However, it does not reflect value created through non-market
>transactions (the so -called informal or grey economy. Given the
>enormous size of the informal economy in Eastern Europe, especially
>Russia, one can easily "increase" the GDP by that much by accounting
>that assigns a value to the informal economy or its part.
Yes. A lot of this "GDP growth" may actually be elements in the shadow economy coming into the light.
>The pre-1989 estimates of the informal sector in Poland I saw gave the
>figures in the vicinity of 12% of the GDP. I would assume that in the
>ex-USSR that figure was much higher (perhaps even double), and increased
>considerably after 1990. I would consider it believable if someone
>estimated that figure to be 30-40% of the GDP.
The World Bank estimates Russia's shadow economy to be 40% of GDP.
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