Author
PhD student in Economics, Allameh Tabatabai University and Master of Planning, Kish Free Zone Organization
Abstract
Economic and social modeling in presence of vagueness and uncertainty has been a challenge to scientists for many years. There are several approaches such as non-parametric one, which are used by economists and statisticians to capture the uncertainties in data and measuring unobservable variables. After introducing "Fuzzy Set", as a mathematical tool for modeling and analyzing the vague concepts, into the literature, some engineers and mathematician paid great attention to this theory for modeling and simulation nonlinear functions.
However, there was a little attention by economists to fuzzy theory in mode ling economic variables and functions. This paper shows the readers how to model economic relations using fuzzy logic, and introduces a new algorithm for measuring the underground economy in Iran. The results of the paper show that the underground economy in Iran which is affected by percapita income and tax incidence had a stable trend during years (1998-1983).
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