Browsing: underground economy

Introduction. Given that the underground economy, as a whole, can stand for and/or deepen the budgetary deficit of any country, by diminishing the level of revenues to the state budget, leading, as a consequence, to restrictions as to the public spending volume, thereby adversely influencing the living standard of its population, the focus of the study is related to laying, to a reasonable extent, the general framework, for limiting, via well-grounded macroeconomic fiscal policies and other related, targeted measures, the negative effects of the same.

Aim of the study. The aim of the paper is to reveal the main causes and consequences of the underground economy, seen as a mix between the shadow economy, reflecting the officially unreported monetary transactions, and the black economy, consisting in the criminal monetary transactions associated with the latter.
Keywords: underground economy, shadow economy, black economy, budgetary deficit, macroeconomic policies
JEL Classification: E26, E61, H62

Introduction. Nowadays, the informal economy can no longer be seen as a temporary, atypical and a marginal phenomenon, and besides, it has more than a fixed character in countries where incomes and assets are not distributed correctly. The informal economy will not experience a decline, if the economic development is not followed by an improvement at the level of employment and if income will remain at the same level. Informal economy cannot be measured accurately. Besides, without the certainty of success, trying to measure it would entail huge costs of information and creation of specific data bases. However, the opinion that the highest relevance cannot be given by the size, but by the dynamics of the informal economy, by its structure and the behavioral archetypes of the economic actors involved, it is widely accepted (the individual offering the job, the firm, the government).

Aim of the study. This paper tries to accurately present all the dangers and the consequences of an informal economy
Keywords: informal economy, economic actors, tax evasion, ghost companies, underground economy, black work market, clandestine labour.
JEL Classification: A1, B4, D00, E2, E26, H26, J21.