FINANCIAL ANALYSIS OF THE IMPACT OF THE INFORMAL ECONOMY ON THE ECONOMY OF SERBIA AND EUROPEAN COUNTRIES

In this paper, the authors point out the informal economy of the Republic of Serbia and European countries as the biggest problem for every country. The following is the share of industries as well as the gross domestic product of nations. They are reasons why the informal economy is so ubiquitous as well as the idea that it is necessary to decrease it. The paper deals with research aimed at determination of the impact of the informal economy, in which sector of the economy it has the biggest, why it persists, and financial losses because of the informal economy. The paper discusses secondary damages due to the informal economy and the causes of why they go on. The paper also analyzes the influence of the shadow economy on the EU and OECD countries' GDPs. The authors discuss why the informal economy persists and what measures should be taken to prevent or at least reduce it.