hidden economy

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Economic activity that is not included in official statistics. The broadest definition of the hidden economy includes legal economic activity that is deliberately concealed from measurement, illegal economic activities (including smuggling, drug dealing, and prostitution), and home production (including subsistence farming). The hidden economy is also known as the shadow economy, black economy, informal economy, and underground economy. The nature of the hidden economy makes it difficult to calculate its size. Estimates place it at around 10 percent of measured gross domestic product for a typical developed economy and up to 70 percent of gross domestic product for some developing countries. See also tax evasion.

Subjects: Economics.

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