An Analysis of the Factors Influencing the Illegal Economy in Iran

Document Type : Scientific research

Authors

Siamak Shokouhifard ^{1 ¶}

Ali Salmanpour ²

Iraj Lotfi ³

Morad Nasiri Moghanloo ⁴

¹ Young Researchers and Elite Club, Ardabil Branch, Islamic Azad University, Ardabil, Iran

² Associate professor, Department of Economics, Marand Branch, Islamic Azad University, Marand, Iran

³ PhD Student, Department of Law, Tabriz Branch, Islamic Azad University, Tabriz, Iran

⁴ Instructor, Department of Law, Payame Noor University, Tehran, Iran

https://doi.org/10.22067/economlaw.2025.91834.1423

Abstract

In a classification, the economy of any country can be divided into two parts: legal and illegal. The illegal economy includes many activities that are not approved and accepted by society and government and judicial authorities. Considering that the illegal economy, while being invisible, can have a high capital potential, if such potential is directed towards the legal economy, it is possible to accelerate and facilitate the movement towards reasonable and sustainable economic growth by relying on the capabilities of society within the framework of legal laws and also by the correct use of resources and factors of production. In this regard, first, the reliability of existing variables is examined by generalized Fuller Dicky test and then, using the ARDL model, the Error Correction Model (ECM) of the shadow economy volume model, and also with The application of the Johansson-Josilius test determines the convergence vectors, and then the effects of shocks and shocks on co-integration vectors are discussed and analyzed. The results show that shadow economy in Iran is affected by economic growth variables, trade restrictions, unemployment rate, tax burden and consumer price index.

Keywords

Illegal Economy

Economic Growth

Economic Factors

Coexistence Vectors

Subjects

• Economic Crimes

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