Response to a reflection by Altiparmakov, Arsić and Ranđelović

The authors of NALED's study „Shadow economy in Serbia in 2017“, professors Gorana Krstić and Branko Radulović, have published an article in the journal „Economic Ideas and Practice“ published by the Faculty of Economy in Belgrade, titled „Reflecting upon a reflection: Shadow economy trends in Serbia in 2012-2017“. The article indicates the fallacies in the critical review presented about the study by a group of authors including Milojko Arsić, Saša Ranđelović and Nikola Altiparmakov in the Quarterly Monitor No. 52.

The study critics have not performed their own analysis of shadow economy scope in 2017, but based on simplified assumptions and the macro-fiscal aggregate trends, they reached a conclusion that shadow economy has remained at an approximately similar level to that of 2012. 

Further on, they start off from a wrong assumption that any case of leaving the shadow zone automatically implies the transition to the legal flows, while ignoring the option that informal businesses may simply be terminated. They also equalize the tax gap with shadow economy, even though these terms are different. 

The journal „Economic Ideas and Practice“ is available on the Faculty of Economy's website, and the article may be downloaded on the following link.