· What is the underground economy?
The underground economy, which I will also refer to as the “illegal economy” (or “underground markets” or “illegal markets”), is that part of the economy where goods and services are produced, exchanged or consumed illegally. These activities are illegal either because the production or consumption of the goods or services is forbidden by law (recreational drugs or some prostitution services, for example) or because legal goods or services are exchanged under illegal conditions (construction services by unlicensed workers, smuggled goods or illegally-sold goods that would otherwise be legal). (3)
This “shadow” economy is more streamlined and more profitable to the participants while less profitable to the government. And this is has undoubtedly become more commonplace in these hard economic times.
The simple fact of the matter is that while people have less money, they will look for other means to gain income, and those methods of income-generation will often be unconventional and will be done “on the side”. These methods will include barter and trade in addition to cash-payment income. (4)
