Black Economy - Explained
What is a Black Economy?
Written by J. Mance Gordon
Updated at April 23rd, 2024
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What is the Black Economy?
A black economy, also known as a black market, informal market, or underground economy, is the collection of business activity and revenue that is not recorded by governments or regulatory bodies.
The black economy generally consists of primarily illegal activities, such as the sale of illegal drugs, illegal firearms, prostitution, human trafficking, etc.
What are the Types of Black Economy
The black economy can be divided into four primary types namely:
- Illegel economy
- Unreported economy
- Unrecorded economy
- Informal economy
What is an Illegal economy?
In this economy, revenue is generated through the violation of laws which are applicable to all the scope of commerce.
What is an Unreported economy?
This economy is determined to find a way around and avoid being a part of all fiscal rules which have been laid down in the tax code.
What is an Unrecorded economy?
This economy defies the government rule defining that all forms of businesses must be reported to government statistical agencies.
What is an Informal economy?
The activities in this economy try to bypass any type of cost associated with the business. They are also not included in partaking in the laws and administrative rules governing the sectors.
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