Level of shadow economy in Ukraine: reasons and ways to overcome

Alina Bukhtiarova,Arsen Hayriyan,Nataliia Vynokurova

doi:10.21511/pmf.07(1).2018.01

Alina Bukhtiarova, Arsen Hayriyan + Show 1 more

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https://doi.org/10.21511/pmf.07(1).2018.01

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Abstract

The article offers an investigation of the level of the shadow economy in Ukraine in the period 2007–2016, the structure of the shadow (“grey”) economy in the sectoral section, Ukraine’s place in world rankings in terms of economic freedom, corruption, favorable business conditions, and competitiveness. The main reasons of high level of shadow sector of the national economy are considered, and several measures regarding the reduction of the shadow economy in Ukraine and improvement of its economic situation are presented.

Highlights

Current development of the world financial system faces an important problem such as the shadow economy, which is the basis for bribery in various spheres: political, economic, social and contributes to the criminalization of society
The purpose of this article is to study the level of the shadow economy in Ukraine, to identify the causes that lead to its emergence and to identify the main ways to address the shadow economy problem to ensure a stable social and economic development of the state
Overcoming the major problems that led to such a high level of shadow economy in Ukraine will accelerate economic growth and improve living standards

Summary

Introduction

Current development of the world financial system faces an important problem such as the shadow economy, which is the basis for bribery in various spheres: political, economic, social and contributes to the criminalization of society. Too large scale of the shadow economy is reflected in the volumes and structure of the gross domestic product, distorting the indicators of economic development of the country. The impact of shadow relations on all branches of social sphere is negative for our society. It is about the significant influence on population incomes, their diversification, unemployment, pension payments, social stratification, and, the low standard of living of the population. The shadow sector leads to irreparable losses for the state budget, and for the economy

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