Definition of Black economy:
Usually untraceable, and hence untaxable, business dealings that are not reflected in a countrys gross domestic product (GDP) computations. An integral part of most third-world and many first-world economies, it is a cash based system in which transaction records are kept in secret account books (called number two accounts). Though it employs illegal (and even criminal) methods, it is a survival practice in repressive tax regimens or where legitimate expression of entrepreneurial activity is made unnecessarily difficult by a maze of regulations. Black economy and black money go hand in hand. Also called parallel economy, shadow economy, or underground economy. See also informal economy.
The black economy is a segment of a country's economic activity that is derived from sources that fall outside of the country's rules and regulations regarding commerce. The activities can be either legal or illegal depending on what goods and/or services are involved. The black economy is related to the concept of the black market. In the same way that an economy is made up of many related markets considered as an integrated whole, the black economy is made up of the collection of various black markets in an economy.
People operate in black economies in order to trade contraband, avoid taxes and regulations, or skirt price controls or rationing. Black economies typically arise when a government restricts economic activity for particular goods and services, either by making the transaction illegal or by taxing the item so much that it becomes cost-prohibitive. A black market may arise to make illegal goods and services available or to make expensive items available for less money (such as pirated music or software).
The part of a countrys economic activity which is unrecorded and untaxed by its government; the black market.
How to use Black economy in a sentence?
- Activity in the black economy is often illegal, usually untaxed, and rarely recorded by official economic statistics. In fact, the activity may not consist of formal market transactions at all, making it very difficult to estimate.
- People will break or ignore the rules imposed when governments intervene, tax, or regulate markets. This can produce net economic benefits or costs to society. .
- A lot of childcare is in the black economy.
- The black economy is all economic activity in a given economy that occurs outside or in violation of the prevailing laws and regulations of society.
Meaning of Black economy & Black economy Definition