Informal Economy.

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The informal sector is economic activity that is neither taxed nor monitored by a government, and is not included in that government's Gross National Product (GNP), as opposed to a formal economy.

Although the informal economy is often associated with developing countries, where up to 60% of the labor force (with as much 40% of GDP) works, all economic systems contain an informal economy in some proportion. The term informal sector was used in many earlier studies, and has been mostly replaced in more recent studies which use the newer term.

The English idioms under the table and off the books typically refer to this type of economy. The term black market refers to a specific subset of the informal economy in which contraband is traded; where contraband may be strictly or informally defined.

Informal economic activity is a dynamic process which includes many aspects of economic and social theory including exchange, regulation, and enforcement. By its nature, it is necessarily difficult to observe, study, define, and measure. No single source readily or authoritatively defines informal economy as a unit of study, although the work of economic anthropologist Keith Hart was integral in defining the term.

To further confound attempts to define this process, informal economic activity is temporal in nature. Regulations (and degrees of enforcement) change frequently, sometimes daily, and any instance of economic activity can shift between categories of formal and informal with even minor changes in policy.

Given the complexity of the phenomenon, the simplest definition of informal economic activity might be: any exchange of goods or services involving economic value in which the act escapes regulation of similar satchel acts.

1 Response to "Informal Economy."

  1. Cristina says:

    In this globalized world we should be in the top of the markets, and one of the requirements is the language, so, is very important know the language that is controling the market in the world. At that time the chinese language is becoming very strong, so let's learn!

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