Estimating the Size and Trends of the Informal Economy in Ghana
Date
2018-12-01
Authors
Ocran, Matthew Kofi
Journal Title
Journal ISSN
Volume Title
Publisher
AERC
Abstract
The purpose of this paper is to quantitatively examine the evolution of the informal economy over
the past four decades. The study used the currency demand approach as analytical framework for
the assessment. The findings suggest that there has been an upward trend in the size of the informal
economy as a proportion of the officially recorded GDP. For instance, the size of the informal economy
as a proportion of the official GDP estimates increased steadily, from 14% in 1960 to 18% by 1977. The
proportion fell thereafter and started picking up again from 1983 to a new high of 30% between 2003
and 2004. The outcome of the study has policy implications particularly for the design of effective
monetary and fiscal policy and the selection of appropriate policy instruments.