black economy

(redirected from Informal economy)
Also found in: Dictionary, Thesaurus, Encyclopedia, Wikipedia.

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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

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.
Collins Dictionary of Economics, 4th ed. © C. Pass, B. Lowes, L. Davies 2005
References in periodicals archive ?
The literature on the informal economy provides a rich array of approaches which are based on different data sources and methods (a comprehensive survey of methods can be found in Kazemier 2006).
Figure 7 shows the relationship between estimates of the informal economy by Schneider (2002) and those produced by Model 2.
As is evident, it is a comprehensive scheme that covers all aspects of the informal economy.
Independent Democracy of Informal Economy Association (Idea) director Vorn Pov said the fundamental labour rights of workers had recently been limited through the use of short-term employment contracts and restrictions placed on the right to march to submit petitions, hold demonstrations and strike.
The informal economy, as the measure defined, refers to the activities by workers and economic units that are not covered by laws or formal arrangements.
Mian Zahid Hussain said that government should also take measures to eliminate child labour in the country in accordance to the conventions of the UNO, which is a major portion of informal economy. According to ILO 5 million child labour is part of informal economy in Pakistan who can be part of formal economy if government make proper mechanism for their education and training.
Therefore, without improving human-resources quality, those working in the informal economy will always be excluded from better job opportunities.
According to Nagaty, the main objective of the establishment of this association is to help integrate the informal economy into the whole system of the state, noting that this association currently holds extensive meetings with a number of ministries concerned to agree on several axes, the most important of which provide incentives for the informal sector for integration.
Workers in the informal economy include independent, self-employed, small-scale producers, and distributors of goods and services, who are not covered by labor laws and have no social protection.
There is also a need for stronger labour inspection systems as it rarely reaches workplaces in the informal economy, where most child labour is found.'
However, several factors could contribute to the proliferation of economic activities outside the umbrella of the law forming what is known as "the informal economy" or "informal businesses." Those factors could either be related to the validity of the laws in place, the level of corruption or efficiency of the concerned public institution, the environment in which the business is operating or the behavior of the individuals or groups who choose to alienate themselves from the mainstream or resist the designated policy.
informal economy A distinction is made between the formal economy, where money is used in exchange, and the informal economy, where work is carried out without monetary recognition.

Full browser ?