Theoretical approaches to defining the shadow economy

Abstract

Subject. This article explores the forms of the shadow economy. Objectives. The article aims to identify conceptual differences between approaches to defining the shadow economy notion. Methods. For the study, we used logical, comparative, and content analyses. Results. The article finds that the concept of the shadow economy includes both illegal activities, which contradict the spirit and letter of the law, and legal activities, through using illegal tools and methods to maximize profits or minimize costs. Conclusions. Social, legal, and economic factors determine the development of the shadow economy. Whether money comes back to the legal economy sector or not, it depends on the form of the shadow economy. To define the essence of the shadow economy, a comprehensive approach is required.