Black Economy



The 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.


For instance, a construction worker who is paid under the table will neither have taxes withheld, nor will the employer pay taxes on the his earnings. The construction work is legal; it is the nonpayment of taxes that classifies the event as part of the black economy. The illegal-weapons trade is an example of black-economy activity that is illegal.

Black markets are those goods and services that form the black (or underground) economy. Typically, black markets 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 software).

  1. Bitcoin

    A digital or virtual currency that uses peer-to-peer technology to facilitate ...
  2. Black Market

    Economic activity that takes place outside government-sanctioned channels. Black ...
  3. Gray Market

    An unofficial market where securities are traded. Gray (or “grey”) market trading ...
  4. Linden Dollar

    A digital currency utilized in the virtual world Second Life. Second Life was ...
  5. Knowledge Economy

    A system of consumption and production that is based on intellectual capital. ...
  6. Economics

    A social science that studies how individuals, governments, firms and nations ...
  7. Macroeconomics

    The field of economics that studies the behavior of the aggregate economy. Macroeconomics ...
  8. Microeconomics

    The branch of economics that analyzes the market behavior of individual consumers ...
  9. Free Market

    A market economy based on supply and demand with little or no government control. ...
  10. Anti Money Laundering - AML

    A set of procedures, laws or regulations designed to stop the practice of generating ...
Related Articles
  1. How To Report A Tax Cheat

    How To Report A Tax Cheat

  2. Taking A Look At Tax Havens

    Taking A Look At Tax Havens

  3. Great Company Or Growing Industry?

    Great Company Or Growing Industry?

  4. Financialization


  5. Price Elasticity Of Demand

    Price Elasticity Of Demand

  6. The Austrian School Of Economics

    The Austrian School Of Economics

  7. Introduction To Supply And Demand

    Introduction To Supply And Demand

  8. Explaining Comparative Advantage

    Explaining Comparative Advantage

  9. Basic Concept Of Absolute Advantage ...

    Basic Concept Of Absolute Advantage ...

  10. Advanced Game Theory Strategies For ...

    Advanced Game Theory Strategies For ...

comments powered by Disqus
Hot Definitions
  1. XW

    A symbol used to signify that a security is trading ex-warrant. XW is one of many alphabetic qualifiers that act as a shorthand to tell investors key information about a specific security in a stock quote. These qualifiers should not be confused with ticker symbols, some of which, like qualifiers, are just one or two letters.
  2. Quanto Swap

    A swap with varying combinations of interest rate, currency and equity swap features, where payments are based on the movement of two different countries' interest rates. This is also referred to as a differential or "diff" swap.
  3. Genuine Progress Indicator - GPI

    A metric used to measure the economic growth of a country. It is often considered as a replacement to the more well known gross domestic product (GDP) economic indicator. The GPI indicator takes everything the GDP uses into account, but also adds other figures that represent the cost of the negative effects related to economic activity (such as the cost of crime, cost of ozone depletion and cost of resource depletion, among others).
  4. Accelerated Share Repurchase - ASR

    A specific method by which corporations can repurchase outstanding shares of their stock. The accelerated share repurchase (ASR) is usually accomplished by the corporation purchasing shares of its stock from an investment bank. The investment bank borrows the shares from clients or share lenders and sells them to the company.
  5. Microeconomic Pricing Model

    A model of the way prices are set within a market for a given good. According to this model, prices are set based on the balance of supply and demand in the market. In general, profit incentives are said to resemble an "invisible hand" that guides competing participants to an equilibrium price. The demand curve in this model is determined by consumers attempting to maximize their utility, given their budget.
  6. Centralized Market

    A financial market structure that consists of having all orders routed to one central exchange with no other competing market. The quoted prices of the various securities listed on the exchange represent the only price that is available to investors seeking to buy or sell the specific asset.
Trading Center