Underground Economy - Explained
What is an Underground Economy?
Written by J. Mance Gordon
Updated at April 23rd, 2024
- Marketing, Advertising, Sales & PR
- Accounting, Taxation, and Reporting
- Professionalism & Career Development
-
Law, Transactions, & Risk Management
Government, Legal System, Administrative Law, & Constitutional Law Legal Disputes - Civil & Criminal Law Agency Law HR, Employment, Labor, & Discrimination Business Entities, Corporate Governance & Ownership Business Transactions, Antitrust, & Securities Law Real Estate, Personal, & Intellectual Property Commercial Law: Contract, Payments, Security Interests, & Bankruptcy Consumer Protection Insurance & Risk Management Immigration Law Environmental Protection Law Inheritance, Estates, and Trusts
- Business Management & Operations
- Economics, Finance, & Analytics
- Courses
What is an Underground Economy?
What are the Activities in an Underground Economy?
Activities within an underground economy are often illegal or prohibited by law. Illicit trades, drug trades, illegal procurement of arms, human trafficking, exchange of stolen items, illegal prostitution and others are underground economy.
How does an Underground Economy Work?
Here are the major points to know about the underground economy;
- Illicit trade transactions, illegal markets, black markets all form the underground economy.
- The underground economy is one in which transactions are carried out without the involvement of the government.
- Trades in this market are untaxed and unregistered.
Measuring the Underground Economy
The underground economy is not included in the annual statistical reports of GDP reports of a country's economy. Economists attempt to estimate the size of underground economies by informal sampling of consumers regarding money spent.
Related Topics
- Economics
- Scarcity in Economics
- Division of Labor
- Microeconomics
- Macroeconomics
- Theory and Models
- Traditional Economy
- Command Economy
- Centrally Planned Economy
- Market Economy
- Free Market Economy
- Collaborative Economy
- Private Enterprise
- Mixed Economy
- Underground Economy
- Black Economy
- Government Market Regulation
- Capitalism
- Conscious Capitalism
- Communism
- Centrally Planned Economy
- Socialism
- Marxism
- Egalitarianism
- Plutocracy
- Neoliberalism
- Underground Economy
- Black Economy
- Globalization
- Imports and Exports
- Gross Domestic Product
- Fiscal Policy
- Social Economics
- Positive Economics
- Mathematical Economics
- Constitutional Economics
- Labor Economics
- Organizational Economics
- Development Economics
- Behavioral Economics
- Environmental Economics
- Evolutionary Economics
- True-Cost Economics
- Managerical Economics
- Experimental Economics
- Welfare Economics
- American Economic Association