SHADOW ECONOMY IN SERBIAIN THE TIME OF COVID 19 PANDEMIC
SHADOW ECONOMY IN SERBIAIN THE TIME OF COVID 19 PANDEMIC

Summary/Abstract: Even as a field of study, the shadow economy is a very complex phenomenon. Although primarily related to underdeveloped and developing countries, shadow economy is present in highly developed countries as well, which indicates its immense scope. The size of shadow economy in the earlier periods has varied, depending on many factors. The objective of this paper is to show the size of shadow economy in Serbia, with particular emphasis on production of goods and services mostly consumed within the households and on illicit employment in the time of COVID 19 pandemic.The fact that there are no universally accepted methods for measuring shadow economy, but a combination of various estimate methods is used instead, adds to the problem. In this paper, we will also discuss the measures that result in reduction of shadow economy. These well-known measures include improvement of business environment and macroeconomic stability, increase of registered GDP, recovery of labour market, improved inspection activities, stricter penalty policy and more efficient collecting of tax charges. Therefore, by implementing specific measures a country can have a direct impact on the size of the shadow economy, butbefore that the country must first consider complex and often opposed relations thatmight result from its decisions.

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