Indirect Evidence of the Effect of Informal Economy in the Behavior of the Foreign Currency’s Prices: A Case Study
Dode Prenga,
Elmira Kushta,
Pjeter Ndreca
Abstract:The effect of informal economy on the behavior of exchange rate is complex and difficult to evaluate in common economic conditions. But if informal sector is sizeable and a certain foreign currency is used for transactions therein without being converted, the supply and the demand for this currency, the velocity of the money circulation, and several other variables would be impacted, implicating a measurable response in the corresponding FX rates’ behavior, while the other currencies’ prices will be less affec… Show more
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