what is the underground economy 
the underground economy refers to economic transactions that are deemed illegal either because the goods or services traded are unlawful in nature or because transactions fail to comply with governmental reporting requirements the underground economy is called the shadow economy the black market or the informal economy understanding the underground economyit is difficult to accurately gauge the size of underground economies because by nature they re not subject to governmental oversight therefore the economic activity does not generate tax returns or appear in official statistical reports however tracking outgoing expenditures even though the transactions are cloaked can give a sense of statistics in other words the money spent that s not accounted for in recorded transactions theoretically represents the breadth of black market activity the american underground economy was estimated to have reached 1 trillion in 2009 representing approximately 8 of u s gross domestic product gdp however by 2013 largely due to the long term effects of the 2008 financial crisis and the resulting contraction of the formal economy underground economic expenditures reached an estimated 2 trillion estimates vary but studies show that the u s underground economy is 11 to 12 of gdp making the underground economy approximately 2 5 trillion in 2021 123global underground economiescompared to most other nations america s underground economy has stayed relatively flat according to findings published by a 2018 international monetary fund study which explored the shadow economic activity of 158 countries between 1991 to 2015 some of the chief takeaways of the report are as follows depending on the context the impact of underground economies can range from harmful to helpful for example in developing countries with large shadow economies the uncollected tax revenue can slow economic growth and hamper the creation of public programs however in other cases participants in underground economies who retain income that would usually go to taxes can boost overall economic activity and stimulate demand this situation holds especially true in nations where the withheld tax revenues would have been siphoned off by corrupt government officials 