Economic functions of informal activities in Romania

As one can discern from the results of new empirical studies, the informal economy grew at a rapid pace in transition countries during the 90s. They were challenged to build up a new system to replace the old one as quickly as possible, creating an arena for market forces and establishing the reign of economic and social equilibrium. According to different reviews, there are three large groups of methods estimating the size or share of the shadow economy: direct approaches; indirect approaches; and model approaches like multiple-causes models or labour supply-based macroeconomic models. All the direct estimations based on various surveys are somehow related to the data provided by the former National Commission for Statistics, currently the National Institute for Statistics (INS). The surveys include household and labour force surveys, enterprise annual surveys and the population census. Inflation is the most important factor leading to the proportional growth in the informal economy in Romania.