The shadow economy and economic development of society: factors and industrial composition

With the help of econometric modeling, a natural link between the shadow economy and economic development of countries has been established. On this basis, it is substantiated that the development of the shadow economy is mainly associated with the expansion of opportunities for obtaining shadow income as a result of the growth in the countries' profitability. Such opportunities are being developed, first of all, in the service sector, then industry, and then in agriculture. It has been revealed that when the economy reaches an average level ofprofitability, the effect of the other factors contributing to the development of the shadow economy becomes predominant. The quality of economic development has virtually no effect on this process.