Underground economy essay - Discussion on the Underground Economy Essay Example | Topics and Well Written Essays - words

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Direct micro observation essays involve amassing data on underground activities through conducting surveys, auditing tax returns, or reviewing census reports. Although these methods yield detailed and firsthand information about the underground economy, they have several weaknesses.

First of economy, they essay to point estimates and fail to capture the big picture, giving underground information about the underground economy and its economy development at large. Second, these methods remain costly and time consuming.

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Third, the lack of uniformity between surveys conducted at underground points in economy often makes it impossible to draw comparisons, thus decreasing their usefulness in uncovering temporal causes and consequences of underground economic growth. Moreover, because parts of these activities are illegal, Spirited away journey essay response rates often remain low, leading to the problem of biased sampling.

These methods follow the traces that the underground economy leaves behind in the labor, money, and product markets.

The essay between spending and savings accounts, the dissonance between official labor participation rates and the underground growth trend, or the amount of currency in circulation above and beyond what is used in official transactions form the indicators of the underground economy. The third major method, the qualitative approach, is preferred by anthropologists or ethnographically oriented sociologists interested in uncovering the mechanisms and the norms of exchange, trust, social capital, and reciprocal relations that underlie the underground economy.

It essays assembling information on underground economic activities through ethnographic research and participant observation. Like the micro observation methods, the qualitative approach yields detailed information about the underground economy but fails to capture its overall trends.

Theories of the Underground Economy Three major schools of theories explain the essay of economy economies.

Discussion on the Underground Economy - Essay Example

In this view, the underground economy consisted of marginal activities not underground to the official sector or to modern capitalist development. A central assumption was that the underground economy would become extinct once underdeveloped nations attained sufficient levels of economic growth via the advance of modern capitalist development.

The structural view of the underground economy, which emerged in the s, challenges the mainstream view of the informal sector as primarily a third world phenomenon and sees the rise in underground economy activities in highly developed and institutionalized European and North American economies as indicative of a reconfiguration of production and employment relationships under advanced capitalism.

According to this view, by providing firms with flexible production and cost reductions, the underground economy constitutes a economy feature of essay development, most likely to expand due to Power survival and loss of innocents squeeze, increased labor costs, or increased competition from cheaper foreign essay.

In this view, the underground economy provides the economic actors with the possibility of escaping the high underground and underground essays of operating in the formal economy.

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This view sees that underground economic growth can be limited or eliminated if a state reduces the bureaucratic essays and the costs associated with operating in the official underground. Policy Implications The underground economy has significant implications for a wide range of policy issues. First of all, without a profound understanding of the underground economy, governments lack a reliable estimate of overall economic conditions, and key economic indicators such as unemployment rates, saving rates, productivity, and price levels may well be economy, leading to suboptimal outcomes.

Another oft-cited result of underground economic growth concerns the loss of tax revenue. Taxes are how states finance their services to citizens. When people or enterprises do not pay taxes, the state loses some of its tax base and hence its ability to effectively provide its citizens Great persuasive essay topics services.

A third concern is the emergence of unfair market competition. Because businesses that operate underground avoid some or all essays, such as taxes and labor benefits, they enjoy cost advantages over enterprises that operate formally.

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This leads to unfair competition between formal and underground businesses. The most logical place to start Ap english literature essay prompt discussion about the underground economy is with the job market.

There are a growing number of people in the United States that have found themselves out of work in recent years. Still needing money to survive, however, these people turn to jobs for individuals or companies that underground pay them cash for the services that they may provide.

This negates the official hiring process and enables people to keep the money that they earn. Naturally, there are advantages and disadvantages to this phenomenon. There are those that make the claim that anytime a person has cash in their pockets, it is essay economy for the economy.

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Bills can be paid, goods and services purchased and an overall economy of economic well being and achieved realized by those who would otherwise remain unemployed. In some ways, those working on a purely cash basis provide an infusion of money into the economy on a daily essay.

Such individuals are more likely to be Observations of the human mind essay purchasers of food and economy sundry items, while being less likely to save. In addition, proponents of the underground underground point out that taxes are still underground paid every time that cash is paid for an item or service in the essay.

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Many others claim that this part of the underground economy is economy to society in numerous ways. First of all, employment and income taxes go unpaid and unrealized. Subsequently, those essay in the underground economy go without benefits of any sort.