The unofficial, and often illegal, part of a national ECONOMY. In it are tax evaders and illegal producers of goods and services. Companies participating in this sector falsify their accounts by omissions or inaccurate entries. Rich and poor, capitalist and socialist, economies all have black sectors. These sectors are prominent in India, Portugal, Italy, as well as the USA and the UK.
The large black economy in Italy could amount to 25 per cent of GROSS DOMESTIC PRODUCT. Methods of measuring the black economy include a comparison of national income with national expenditure (a method flawed through errors in both of these aggregates) and the use of household expenditure surveys to calculate undisclosed incomes through discrepancies between household income and spending. Also, changes in the ratio of cash transactions to total transactions indicate that many prefer the less detectable form of trading central to the black economy If tax authorities succeeded in discovering these activities, they would risk stopping this form of work altogether.
References
Heertje, A., Allen, M. and Cohen, A. (1982) The Black Economy, London: Pan.
Smithies, E. (1984) The Black Economy in England since 1914, Atlantic Highlands, NJ: Humanities Press; Dublin: Gill & Macmillan.
This is the complete article, containing 196 words
(approx. 1 page at 300 words per page).
