Professor Schneider’s Shadow Economy (SSE): What Do We Really Know? A Rejoinder
Abstract
Professor Schneider’s “Comment” on my “Reflections” paper fails to answer the key critiques leveled against his MIMIC estimates of the shadow economy. His “Comment” only serves to reinforce the contention that his documentation is inadequate, that his normalization procedures are arbitrary and conceptually flawed, and that his explanation of the “serious calibration error” that reversed the trend of SSE earlier estimates is untenable. A recent attempt to reproduce his findings also concludes “that it is not possible to replicate Schneider’s MIMIC indexes based on the documentation from the paper.” In short, the evidence challenging the veracity of his MIMIC estimates of the worldwide shadow economy is so strong as to question their place in the academic, policy and popular literature.
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