Leandro Medina

Leandro MedinaLeandro Medina is a Senior Economist working in the IMF’s Strategy, Policy, and Review Department. Previously, Leandro worked in the IMF’s African Department on frontier economies matters, particularly with countries such as Mozambique and Ghana, and a key issue of the Regional Economic Outlook publication, which focused on the size and characteristics of the informal economy in African countries, and before that, Leandro focused on macro fiscal issues in South-east Asia at the Fiscal Affairs Department and he covered regional policy issues in the Middle East and Central Asia, where he also contributed to the Regional Economic Outlook. Before joining the IMF, he worked as an international consultant at the Inter-American Development Bank, participating in Portfolio Review and Policy Dialogue missions to Argentina and Uruguay. His research covers a variety of topics in macroeconomics and international finance. He holds a doctorate in Economics from The George Washington University.

Papers Published in World Economics:

Shedding Light on the Shadow Economy

The shadow or informal economy covers all economic activities which are hidden from official authorities for monetary, regulatory and institutional reasons. Although widely used, multiple indicator-multiple cause (MIMIC) models have been criticised, and we develop a modified model and database covering 157 countries over the years 1991 to 2017. We tested our model using satellite data on nocturnal light intensity as a proxy for the size of countries’ economies, and compared our results with the figures of 23 countries’ national statistical offices, finding stable and similar results. The average over all countries and over the whole period is 30.9% of GDP. The shadow economy is large in some regions (Latin America and sub-Saharan Africa) and there is sizeable heterogeneity within regions. On average, from 1991 to 2017 the shadow economy declined by 6.8%. In the short term the shadow economy has a negative impact on the official one and in the long term it has a positive effect.

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