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 ?
Experts say that the black economy has deeply dived in the everyday life and work of citizens and it needs to be integrated in the official economy along with a long-term strategy and not with individual measures.
Worsening economic situation and raising the tax burden in Lithuania nowadays has significantly increased the black economy. It is also likely that the economic downturn will increase the dimension of hidden employment.
The consequences of black economy in India have been widespread as well as far-reaching.
He added that according to the government's estimations, the black economy in the country amounted to 25-30% of GDP.
If the use of credit cards increases by 10 percent in Turkey, the black economy would shrink by six percent in Turkey.
Aleksandar Dimkovski comments for Nova Makedonija that something is wrong with the mitigation of the punitive policy because when fees were increased and reduced, the explanation was the same--to improve the business climate and reduce the black economy. The theory but also practice showed that if the fees are the same or if they are missing, the crime, that is, breaking of the laws is always paid off.
"Those involved in this black economy may be selling fake DVDs or CDs to your children today, but tomorrow it could be drugs "They will stop at nothing to make a profit."
I have mentioned a number of times via this column DWP raiding fish processing plants in Scotland and finding 50% were black economy.
However, at one address, although the rent was paid on the dot, the black economy was prospering.
This theatrical maneuver impressed political rivals sufficiently to allow Dayaks to gain control over several timber-rich districts, which had a thriving black economy. Malays later imitated these techniques to stem the tide [author].
Next year's planned ID cards would give illegal immigrants a chance to sort out residency and stop working for cash in the untaxed black economy.
Dr Arun Kumar, Professor of Economics at Jawaharlal Nehru University, estimates that 40 per cent of India's GDP is generated in the black economy. The annual loss of revenue (approx US$100,000 million) could wipe out India's fiscal deficit two and a half times over.