black economy


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Black Market

A market for products that are illegal, stolen, or otherwise need to be hidden from regulatory authorities. A black market encompasses the horrific (e.g. human trafficking) as well as the more mundane (e.g. participating in the market to evade taxes). Legal products on a black market are usually less expensive than on the regulated market because sellers do not pay taxes on their goods and services. That said, there is little or no recourse for the customer if and when a black market product fails. It is worth noting that black markets tend to be largest in jurisdictions where there are the most regulations and government monopolies. It is also known as an underground market.

black economy

NONMARKETED ECONOMIC ACTIVITY that is not recorded in the NATIONAL INCOME ACCOUNTS, either because such activity does not pass through the market place or because it is illegal. Illegality is not the same as nonmarketed activity. Illegal economic activity may operate quite efficiently in the usual PRICE SYSTEM, which is determined by SUPPLY and DEMAND. Examples may be the purchase and sale of illegal drugs on the street, or alcohol in the US prohibition era of the 1920s, or foodstuffs in Britain during the Second World War when RATIONING was in force. Nonmarketed activity does not have a price determined by demand and supply Certain nonmarketed activity may be undertaken for altruistic reasons, for example, the services of a housewife on behalf of her family and the work of charity volunteers. Other nonmarketed activity is done on a BARTER basis, for example, where a mechanic services the motor car of an electrician who in return installs new light fittings in the mechanic's house. Money has not changed hands and the activity is not recorded. Most references to the black economy refer to the illegal situation of people working without declaring their income. See BLACK MARKET.
References in periodicals archive ?
The simple fact is that most people do not wish to be involved in the black economy, certainly not the people doing the paying; they are involved because current legislation is ineffective at prevention, or does not give them an alternative, and they are consequently forced to be involved.
Mr Harrison said he felt the new approach to cracking the black economy would actually help those who are involved in it by providing them with advice on how to 'go straight'.
This black economy costs the Government pounds 80 billion - almost as much as the Government spends on social security benefits and approximates to ten per cent of the whole of the UK's trading.
The black economy is thought to make up around 10 per cent of Britain's gross domestic product.
Our compliance units across Britain will be looking at a wide range of people who operate within the black economy.
Consumer Minister Melanie Johnson has pledged a "no tolerance" campaign against tricksters who sell counterfeit goods as part of Britain's booming pounds 8billion black economy.
But the Government must tackle the massive black economy where home owners charge small fortunes to tenants who live in appalling conditions but who fear being thrown out onto the street if they complain.
The Black Economy is usually referred to all those perfectly legitimate activities, resulting in transactions (either in kind or for payment) between individuals, which are then hidden from the authorities, principally the tax authorities.
Ms Currie, who was Food Minister under Margaret Thatcher, wrote on the Spectator website: "Free food subsidises low wages, it helps support the black economy, it pauperises those it seeks to help.
He said that majority of the decision are being taken to please elite which has frustrated all efforts to raise revenue, broaden tax net, contain increasing black economy or get economy documented.
As one in ten of us have yet to pay the bills of last Christmas, a couple of black economy experts are upbeat.
Lobban also said that government online taxation and benefits services could be targeted in future, adding that a black economy had already developed which saw UK citizens' credit card details offered for sale.